Former Energy Secretary’s Startup Mints Three Billionaires Despite No Revenues

Fermy America: Billionaires Minted Despite No Revenue

Key Concepts:

• Real Estate Investment Trust (REIT)
• Data Centers
• Hyperscalers
• Gigawatt (GW)
• Letter of Intent (LOI)
• Illustrative Returns
• Nuclear Energy
• Natural Gas
• Solar Energy

Introduction

The video discusses how Fermy America, a newly public real estate investment trust (REIT) co-founded by former Energy Secretary Rick Perry, has minted three billionaires despite having no revenue. This is attributed to the booming demand for data centers and the land they occupy.

Fermy America's IPO and Valuation

• Fermy America went public on the NASDAQ.
• The stock opened at $21 and closed at $32.53 per share, a 55% increase.
• This valued the company at $19 billion, despite having no sales.
• The company was founded in January and has lost $6.4 million in its first six months.

Key Individuals and Their Stakes

• Toby Nagabau: President and CEO, owns an estimated 28% stake worth $6 billion.
  • His stake is largely held in trusts for his wife and two children.
• Griffin Perry: Rick Perry's son, owns an estimated 11% stake worth $2.3 billion.
• Steven Msel: Investor through Penross Energy, worth $1.8 billion.
• Rick Perry: Owns a stake worth approximately $540 million. His net worth was estimated at $3 million in 2019.

Fermy's Business Plan and Strategy

• Fermy is targeting potential hyperscaler tenants like Musk's XAI, Open AI, and Anthropic.
• The company signed a letter of intent (LOI) in September for its first gigawatt (GW) of power with an unnamed "investment grade tenant."
• Fermy estimates it could generate $1.5 billion in revenues from a lease for 1 GW of capacity, but these are considered "illustrative returns" rather than projections.
• The company's business plan centers on "Project Matador," a 5,236-acre site in Amarillo, Texas.
• The goal is to deliver up to 11 GW of energy from natural gas, nuclear, and solar plants.
• Fermy aims to bring 1.1 GW online by the end of 2026 in conjunction with the local utility.
• Fermy holds a 99-year lease to the land, which is owned by Texas Tech University.

Energy Sources and Partnerships

• Initially, Fermy will rely on natural gas, similar to other large data centers like Elon Musk's XAI Colossus.
• Fermy signed an LOI with Seaman's Energy to purchase three gas turbines to generate 1.1 GW.
• The deal also involves collaboration on nuclear steam turbines and integrating them into four Westinghouse nuclear reactors.
• Rick Perry is a strong proponent of nuclear energy.

Competition

• Fermy will compete with established data center operators like Coreeave.
• Coreeave's stock has more than tripled since its IPO, valuing the company at $60 billion and minting five billionaires.
• Coreeave's customers include Microsoft, Meta, and OpenAI.

Conclusion

Fermy America's rapid valuation and the creation of multiple billionaires highlight the immense demand and potential profitability in the data center real estate market. Despite having no current revenue, investors are betting on Fermy's ambitious plan to provide substantial power capacity to hyperscalers, particularly through its Project Matador site. The company's success hinges on securing tenants and executing its energy generation strategy, which includes a mix of natural gas, nuclear, and solar power.