Shares of Fermi Inc. (NASDAQ:FRMI) climbed 10% on Wednesday after the company announced it had rejected two separate SEC filings from former chief executive Toby Neugebauer that sought to force shareholder action and alter the composition of the board.
Fermi said it declared invalid an SEC filing in which Neugebauer requested a special shareholder meeting slated for May 29, 2026. A second filing from Neugebauer sought to solicit shareholder consents for a meeting on or about June 30, 2026. The company said both submissions were improper and urged shareholders not to support either effort.
The board characterized the proposals as the work of a disgruntled former CEO and emphasized that Neugebauer was terminated for cause. Fermi noted that during Neugebauer's tenure the share price fell by more than 80%.
According to the company, the actions that led to Neugebauer’s removal and subsequent termination violated his employment agreement and multiple company policies. Fermi also said the ex-CEO’s filings appear aimed at expanding the board, filling it with his nominees, and pursuing a rapid sale of the company.
Fermi pushed back on the notion of an immediate sale, saying a transaction executed at current trading levels would be premature and could lead to a deal below the company’s intrinsic value. The company said it has secured substantial backing from shareholders, investors, and counterparties for its strategic initiatives, including the Fermi 2.0 plan and Project Matador.
Fermi further pointed to charter provisions designed to preserve its status as a real estate investment trust. Those protections include a redemption provision that could materially reduce Neugebauer’s ownership stake and restrictions that would prevent him and related parties from acquiring additional shares.
The company’s public statements leave several governance issues unresolved in the near term, including whether Neugebauer will pursue further action following the rejections and how shareholders will ultimately respond to competing proposals. For now, the board has taken a firm stance against the solicitations and signaled confidence in its strategic roadmap and governance safeguards.
Clear summary: Fermi dismissed two SEC filings from its former CEO seeking shareholder meetings and board control, prompting a 10% rise in the stock. The company cited violations of employment terms and company policies as grounds for Neugebauer's termination for cause, urged shareholders to oppose the solicitations, and highlighted charter mechanisms that protect its REIT status and ownership structure. Fermi also warned that an immediate sale at current prices could undervalue the company and said it has significant support for its Fermi 2.0 strategy and Project Matador.