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Flex Stock Falls 7% on Axiom Spin-Off Valuation Doubts
Why did Flex stock fall 7%?
Flex (FLEX) stock fell about 7% to roughly $109 on Tuesday after investors questioned the $37.5 billion value for its Axiom cloud and power spin-off, citing the unit's margins and spending.
Key numbers
| Flex share price (Oct 13) | $108.97-6.9% |
|---|---|
| Axiom enterprise value | $37.5Bset by $2.0B preferred deal |
| Flex stock vs June 2026 high | $162.07 high-32.8% from high |
| Flex stock year to date | +71.1%since Jan 1, 2026 |
| Axiom yearly revenue | $6.6B+35% latest quarter |
| Flex market cap (Oct 6) | $43.1B24x forward P/E |
What happened
Flex (FLEX) stock fell about 7% to roughly $109 on Tuesday after investors questioned the $37.5 billion value for its Axiom cloud and power spin-off, citing the unit's margins and spending. General Catalyst and Koch Equity Development agreed on October 5 to invest $2 billion in Axiom, setting that value. Chief executive Revathi Advaithi is due to lead Axiom, and Michael Hartung is expected to run Flex after the split in early 2027. Flex also backs the deal: if the split slips past 2027, it must repay investors more than they paid (per).
Why it matters
Flex is testing how much investors will pay for AI data center power equipment. Its Axiom unit made $6.6 billion in yearly sales, growing 35% last quarter, yet the $37.5 billion price tag is close to Flex's whole $43 billion stock value before the drop. If the split is delayed, the deal's guarantees could cost Flex money (per).
Who this affects
- MarketmixedMedium impact
- Tech hardware investors weigh AI enthusiasm against spin-off valuation risks.
- CompanybearishMedium impact
- Flex shareholders face a lower share price and guarantee risk.
- CompetitorsneutralLow impact
- Axiom's price tag becomes a yardstick for rivals.
- IndustrybullishMedium impact
- AI data center power demand is drawing big private money.
Flex vs Celestica, Jabil, Vertiv
How we got here
Flex names Hartung expected Flex CEO; Advaithi to lead Axiom after split
Axiom valued at $37.5B in $2.0B convertible preferred investment
Flex shares fall about 7% on spin-off valuation and guarantee worries
What to watch
- Flex shareholder vote and Singapore High Court approval needed to complete the Axiom splitQ1 2027
- Spin-off must finish by December 31, 2027, or Flex's redemption guarantee is triggered (per)2027-12-31
Educational content only. Not investment advice.
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