From Startup Fortune · · 1m 20s
NextDC Shares Crash After Melbourne Power Upgrade Blocked
NextDC shares plummet 37% as Melbourne council blocks critical grid upgrade for data center.
In brief
NextDC shares plummet 37% as Melbourne council blocks critical grid upgrade for data center. NextDC shares dropped 37% after Melbourne's West Footscray council refused to approve a power line upgrade for its M3 data center, halting its FY27 financial guidance. Originally reported by Startup Fortune.
NextDC shares crash
NextDC shares plummeted 37% after Melbourne's West Footscray council blocked a critical grid upgrade for its M3 data center.
“nextdc asked the asx to halt its shares on october 19”
FY27 financial guidance cut
NextDC revised its FY27 EBITDA guidance from a$385 million to a$245 million and net revenue from a$640 million to a$500 million.
“the ebitda for the financial year through june 2027 will land between a$245 million and a$265 million”
M3 data center blocked
Melbourne's West Footscray council refused to approve a 225-megawatt grid connection for NextDC's M3 data center.
“a council in melbourne's west hasn't signed off on a power line upgrade”
Jemena utility delay
Jemena, the electricity distributor, said work on the grid upgrade won't resume before february 2027 due to community opposition.
“jemena told nextdc it does not expect to resume the work before february 2027”
AI infrastructure bottleneck
The delay highlights a critical bottleneck in ai infrastructure: local council approvals for grid upgrades, not chip shortages or financing.
“this isn't an isolated case microsoft recently pulled out of its data centre deal with uk operator nscale”
Investor impact
NextDC's stock dropped over 40% after trading resumed, wiping out annual gains and down 25% over the past year.
“when trading resumed the stock dropped more than 40 percent wiping out its gains for the year”
What's next
NextDC's board faces pressure to address the grid connection delay before its fy27 financial results.
“nextdc's board had not yet met to assess the delay's full impact when it requested the trading halt”
The takeaway
NextDC shares dropped 37% after Melbourne's West Footscray council refused to approve a power line upgrade for its M3 data center, halting its FY27 financial guidance.
