(Bloomberg) — Shares of Oklo Inc., the nuclear fission reactor company backed by OpenAI Inc’s Sam Altman, tumbled Wednesday after Kerrisdale Capital said it is shorting the stock.
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The report claims that “virtually every aspect of Oklo’s investment case warrants skepticism,” sending the stock down as much as 10%. The shares pared much of the decline, falling about 6% in afternoon trading in New York.
Oklo’s shares have recently risen in value, rising more than 20% this week through Tuesday’s close, after falling 25% on Friday following the earnings release and the expiration of a lock-up period that allows investors such as Peter Thiel’s venture capital firm to start selling shares.
Oklo declined to comment.
Since the company went public in a special acquisition in May, its shares have risen more than 150%.
“In classic SPAC fashion, Oklo has sold the market on inflated unit economics while grossly underestimating the time and capital required to bring its product to market,” the Kerrisdale report said.
The company is among a wave of companies developing so-called small modular reactors that are expected to be built in factories and assembled on site. Supporters say the approach will make it faster and cheaper to build nuclear power plants, but the technology is unproven. Only a handful have been developed, and only in Russia and China.
Oklo has said it expects the first system to be in service in 2027, but the Kerrisdale report highlights numerous technical and regulatory hurdles that could delay that schedule. Oklo is pursuing a new technology whose design it says will be safer and cheaper than conventional reactors in use today. The company’s design does not have approval from the U.S. Nuclear Regulatory Commission, a process that typically takes years.
Wall Street is divided on the company so far. Of the four analysts covering Oklo, two have a buy equivalent rating and two are neutral. The average price target implies a return of approximately 5% relative to where shares are trading.
In addition to Altman and Thiel, the company has another potentially high-profile connection. Board member Chris Wright was nominated last week by President-elect Donald Trump to lead the Energy Department.
(Updates stock movement and adds company commentary.)
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