Investing.com -- Kerrisdale Capital said Wednesday that it is short shares of Oklo Inc. (OKLO), a nuclear energy company that has surged 300% since going public via SPAC six months ago.
Despite Oklo's skyrocketing stock price amid growing retail interest in nuclear energy, Kerrisdale criticizes the company's lack of regulatory approval, its over-optimistic projections, and its untested technology.
Oklo shares are down over 4% on Wednesday.
In their short report, Kerrisdale describes Oklo as a "story stock" with no revenue and unproven commercial viability for its small modular reactors (SMRs).
The firm argues that Oklo's ambitious goal of deploying its first reactor by 2027 is unrealistic, citing a former Nuclear Regulatory Commission (NRC) Commissioner who stated the timeline is "beyond optimistic" and that licensing alone could take at least four years.
Kerrisdale also questions Oklo's claims of economic and operational advantages, noting, "Oklo believes its small, liquid sodium-cooled reactors will be cheaper, easier to build, and safer than conventional nuclear plants – the same benefits touted by small, modular reactor (SMR) proponents for decades."
They add: "We believe investors should be wary of unsubstantiated claims spouted by these 'Nuclear Bros.'"
They point to the cost escalations faced by other SMR projects and Oklo's lack of a reliable long-term fuel supply, which won't be resolved until the 2030s.
Moreover, Kerrisdale highlights fundamental management and financial challenges. The short seller said a former Oklo employee described the leadership as "a team of very inexperienced people," and Kerrisdale estimates that Oklo will require $2.7 billion in additional capital over the next five years to execute its plans.
Kerrisdale concludes that Oklo's stock price is "unsustainable" and likely to face setbacks as delays, escalating costs, and the need for dilutive capital raise doubts about its long-term prospects.