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2 Big Energy IPOs Flopped This Year. It Doesn’t Bode Well for 2026.

Dec 26, 2025 11:11:00 -0500 by Avi Salzman | #IPOs

Venture Global stock has dropped far below its IPO price this year. (Kathleen Flynn/Bloomberg)

Key Points

There were two major energy-related initial public offerings in 2025, and both have been busts.

Shares of Venture Global, which builds terminals to export liquefied natural gas, or LNG, are down 70% since the company’s January IPO. And Fermi, which is developing a massive campus for data centers in Texas, has plunged 75% since its October debut. Both face major challenges in 2026 that make a stock rebound far from certain.

The stocks’ wipeouts are particularly notable because both companies tapped into themes that seemed unstoppable. Venture Global is the fastest-growing player in LNG exports, which have been soaring as Asia and Europe buy more of it to power their electricity grids and heat homes.

Fermi has pledged to build the largest data center campus in the world, powered by natural gas, solar panels, batteries, and nuclear energy. Tech companies are desperate for electricity for their AI data centers, causing demand for power to surge around the country.

Both companies attracted substantial interest from investors when they first started trading. But the sizzle soon turned into a fizzle.

Venture Global’s offering was the biggest energy IPO in years. The company raised $1.75 billion, the largest haul since at least 2019, according to Renaissance Capital, a provider of pre-IPO research and IPO-focused exchange-traded funds. That compares to the $600 million raised by five energy IPOs combined in 2024.

But trouble was already brewing for Venture Global during the IPO process. The Virginia-based company had initially been aiming for an IPO that valued the company at up to $110 billion. But it cut its target nearly in half during the process; it became clear that investors weren’t willing to pay that much. LNG is certainly a growing market, but it’s also a competitive one. Venture Global isn’t as big or profitable as industry leader Cheniere Energy, for instance. The IPO ended up valuing Venture Global at around $60 billion, or $25 a share. It now trades below $8 per share.

Two problems have dogged the stock. One is that Venture Global has substantial legal exposure due to disputes with several of the companies that buy its LNG, including BP and Shell. Those companies purchase the LNG that Venture Global produces under long-term contracts, to sell to end users like power companies overseas. The dispute is over the timing of when Venture Global was expected to start providing the LNG.

The company started exporting LNG from its first facility, known as Calcasieu Pass, in 2022. But because Venture Global didn’t consider the plant to have reached full commercial operation, it said its long-term contracts to supply the LNG had not started yet. Instead, it sold its cargoes directly on the LNG spot market, allowing it to profit off the wide spreads in the LNG market that had opened up because of Russia’s invasion of Ukraine.

An arbitration court at the International Chamber of Commerce ruled in favor of Venture Global in its case with Shell this year, but against it in its case with BP. Shell has appealed, and other cases still loom. The company’s total financial liability is still unclear, but the legal uncertainty is weighing on shares, investors say. One portfolio manager who owns Venture Global shares says the stock price already reflects a bad legal outcome, and the resolution to these cases should cause the stock to rebound.

“The uncertainty of large lawsuits out there against you weighs on the stock—almost more than the bad outcome happening,” said Henry Hoffman, co-portfolio manager of the Catalyst Energy Infrastructure Fund. “I think that that time will ease concerns” around the lawsuits, he added.

The other problem for Venture Global is that the LNG market looks like it could be oversupplied as soon as 2027, which would cause prices overseas to fall. Venture Global has succeeded in building LNG plants faster than any other player, using modular construction techniques that allow its process to be replicated quickly. But its operational success will only translate into profits if demand holds up.

The company notes that it has signed contracts for about 95% of the capacity at its first three projects, reducing its pricing risks. In a statement to Barron’s, CEO Mike Sabel said that Venture Global went from an unknown to the country’s second-largest LNG producer in just four years.

“We look forward to building on this momentum and believe the long-term strength of our business will ultimately be realized and reflected in the market,” he said.

Analysts tracked by FactSet are betting that Venture Global stock can regain some lost ground, but few, if any, see it climbing back to its IPO level in the next year. Their average target price is $11.62, less than half the IPO price.

Fermi has an even bigger hill to climb. The Texas company was founded just a few months before the IPO, in an attempt to attract investors looking to cash in on rising power demand from artificial-intelligence data centers. It vowed to build enough power plants on a plot of land in West Texas to electrify a large city, selling the power to data center operators like Alphabet or Microsoft. The pitch seemed to work at first. The company’s IPO raised $683 million, and the stock surged on its first day from $21 per share to $32.53. Since then, it has dropped to around $8.

The problem is its business model is “if you build it, they will come.” And so far, the customers haven’t come.

Earlier this month, Fermi disclosed that its first prospective data center tenant had backed out of a deal to pay Fermi $150 million up front for power infrastructure. Without tenants willing to pay in advance, the business model breaks down. Fermi says it wants to build 11 gigawatts of electricity capacity, at least four of which will be from nuclear power plants. But doing so will invariably cost tens of billions of dollars, and Fermi doesn’t have anywhere near that sum on its balance sheet. As of the latest quarter, Fermi had $84 million in unrestricted cash and $503 million in total assets on its balance sheet. It hasn’t brought in any revenue. It needs tenants to start signing up soon to keep the cash flowing.

Fermi didn’t respond to requests to speak with CEO Toby Neugebauer.

The company still has believers. Evercore analyst Nicholas Amicucci wrote in a note this month that the loss of the $150 million deal may have been a blessing in disguise, because the value of power is increasing and Fermi’s next deal might come at an even higher price tag.

“The company is in no short supply of demand for access to the potential 11GW of power,” he wrote. His price target is $20. Fermi’s concept seemed attractive when it made its public markets debut. But until investors see proof of a firm deal with a tenant, they’ll continue to have doubts about the stock.

Write to Avi Salzman at avi.salzman@barrons.com