Firmus IPO may be postponed; OpenAI revenue miss knocks chipmakers

Australian futures are pointing to a small gain when trading opens across the Tasman as the Firmus Technologies initial public offering hangs in the balance, with a report that the neocloud artificial intelligence infrastructure firm was weighing a private funding round instead of listing.

Meanwhile, the tech-heavy Nasdaq Composite dropped in late trading after a report that OpenAI’s revenue was tracking lower than previously signalled shook semiconductor firms and chipmakers.

Oil prices remained elevated, although US President Donald Trump’s dismissal of reports that he was considering a strike on Iran before the November midterm elections took the heat out of the commodity’s gain and cooled government bond yields.

And Billabong-owner Authentic Brands reportedly joined the group of potential suitors for KMD Brands, which is entertaining multiple bidders.

The land Downunder

Australian futures are pointing to a 0.1% gain for the resources-heavy S&P/ASX 200 index, shrugging off declines in US and European stock markets, with gold futures up 0.5% at US$4,156 an ounce at 7am in Auckland.

The Firmus IPO has been hogging the headlines in Australia as investors pushed back on pricing in what would be the country’s second-biggest listing behind Telstra’s debut in 1997. Bloomberg reported Firmus was weighing a private funding round instead of listing after the bookbuild closed with no clear indication on pricing or deal structure.

Meanwhile, the Australian Financial Review’s Street Talk column reported any delay to the IPO would increase dilution of the founders and early investors, with strategic investors including Nvidia and Blackstone getting a more favourable conversion of shares if an IPO came after Nov 30

The AI trade came under pressure after Samsung Electronics’ surging quarterly profits fell short of hyped expectations yesterday, while the Financial Times reported OpenAI’s annualised revenue of US$50 billion at the end of September was below the US$70 billion rate previously reported.

The Nasdaq Composite dropped 1.5% in late trading, with the likes of Nvidia and Intel declining, while the S&P 500 slid 0.7%. The Dow Jones Industrial Average was marginally weaker in late trading, with Nvidia, Amazon and Caterpillar at the bottom of the leaderboard.

Widespread abuse

Separately, US vice-president JD Vance suspended the immigration programme used by tech firms such as Microsoft, saying there had been widespread abuse of the scheme.

Chipotle Mexican Grill climbed 6.7% in late trading after the FT reported Starbucks investigated a takeover of the burrito chain. Starbucks was down 3.3%.

“Equity markets are weaker, with the tech sector acting as a significant drag,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “US long-term treasury yields are lower, having fallen sharply after pushing up to recent highs.”

Brent crude oil futures rose 4.2% to US$104.44 as attacks on tankers in the Persian Gulf kept energy traders on edge. The price came off earlier highs after US President Donald Trump said he wouldn’t attack Iran before the midterm elections and that officials had productive discussions with the Islamic Republic.

The yield on US 10-year treasuries dropped 7 basis points to 5.24% as oil eased from its peaks, while Federal Reserve governor Christopher Waller said policymakers had flexibility on the timing of rate hikes. New Zealand’s 10-year government bond yield was at 5.11% at 7am in Auckland, while the kiwi dollar was unchanged at 56.04 US cents.

Stock markets across the Atlantic were also weaker as European banks remained under pressure amid elevated eurozone bond yields. The UK’s FTSE 100 slipped 0.2%, Germany’s DAX fell 1.2% and France’s CAC 40 declined 0.5%.

KMD Brands will be in view after The Australian’s DataRoom reported Authentic Brands joined three other bidders for the owner of Kathmandu and Rip Curl. The dual-listed company has more than halved in value on an adjusted basis so far this year, and has said it was engaging with multiple parties after receiving a number of approaches through a review of its business this year.

No local data are scheduled today.

Reporting by Paul McBeth. Image from Zac Wolff on Unsplash.