Fermi (FRMI) fell 4.3% on Monday after the company disclosed that it received a subpoena from the U.S. District Court for the Eastern District of New York. The request is tied to documents related to Project Matador, Fermi’s data center campus under development in west Texas.

The subpoena also sought records connected to former members of Fermi’s management team. According to a Friday filing, the SEC made a similar document request. Subpoenas issued through a federal district court are generally sought by prosecutors or a grand jury, and receiving one does not by itself indicate wrongdoing by a company or its executives.

Fermi Inc. Common Stock, FRMI

The stock opened at $6.40 on Monday, after closing roughly 3% lower on Friday before the additional decline. That leaves the shares more than 80% below their 52-week high of $36.99.

The legal scrutiny comes during an already unsettled period for the company. Co-founder and former CEO Toby Neugebauer left in April, in part because of difficulties securing an anchor tenant for Project Matador. Last Wednesday, Fermi appointed Lee McIntire, a former independent director, as CEO.

First Anchor Tenant Secured

Despite the recent pressure, Fermi announced a key development last week. The company signed its first binding lease with AI-computing provider TensorWave for up to 650 megawatts of capacity. The agreement gives Project Matador its first confirmed customer. The signing comes as power availability, not just chips or land, has become one of the tightest constraints on new AI data center construction in the United States, pushing some developers toward dedicated on-site generation to shorten timelines.

Construction firm Hillcore is also set to build a 2.6-gigawatt gas-fired power complex at the Matador site in Amarillo, Texas — capacity comparable to the combined output of two large nuclear reactors. Fermi said it expects 640 megawatts to be operational by the fourth quarter of 2027.

The company has said Project Matador could eventually reach 17 gigawatts of total capacity, a figure that would exceed the roughly 6.8 gigawatts at Grand Coulee, the largest power plant in the United States.

Institutional Selling and Analyst Pressure

Manufacturers Life Insurance reduced its Fermi position by 81.7% in the first quarter, selling 374,995 units and retaining 83,805 units valued at about $489,000. Several smaller institutional investors opened new positions in the fourth quarter, but selling by larger holders remained notable.

Insiders have also been selling shares. Director James Richard Perry, who co-founded the company alongside former Texas Governor Rick Perry, sold 863,637 units on June 30 at an average price of $7.31, for proceeds of more than $6.3 million. Insider Mesut Uzman sold 79,509 units on June 3 at $6.31. Over the past 90 days, insiders have sold more than 1 million units worth roughly $7.3 million.

Analyst views are mixed. Stifel Nicolaus lowered its price target from $29 to $17 while maintaining a “buy” rating. Mizuho cut its target from $27 to $11 and kept an “outperform” rating. UBS downgraded the stock from “buy” to “neutral” and set a $6 target. The overall consensus remains “Moderate Buy,” with an average price target of $20.67.

Fermi reported second-quarter earnings of -$0.04 per share, beating the -$0.06 consensus estimate. Analysts still expect a full-year loss of about $0.33 per share.

The company said it has raised more than $431 million in capital and delivered three F-Series turbines as part of its 90-day milestone targets. The stock’s 50-day moving average is $7.20. The checkpoints Fermi has set for itself — further progress against those 90-day milestones, execution of the TensorWave lease, and the 640-megawatt operational target for late 2027 — now sit alongside any additional disclosures about the subpoena and the SEC’s document request.

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