(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 alleges that “virtually every aspect of Oklo’s investment case warrants skepticism,” sending the stock down as much as 10%. Shares pared much of the decline and were down about 6% in midday trading in New York.
Oklo shares have whip-sawed recently, rallying more than 20% this week through Tuesday’s close after falling 25% on Friday following its earnings release and the expiration of a lockup period that allows key investors like Peter Thiel’s venture capital firm to start selling shares.
Oklo declined to comment.
Since the company went public via a special purpose acquisition merger in May, its shares have soared more than 150%.
“In classic SPAC fashion, Oklo has sold the market on inflated unit economics while grossly underestimating the time and capital it will take to commercialize its product,” the Kerrisdale report said.
The company is among a wave of firms developing so-called small modular reactors that are expected to be built in factories and assembled on site. Advocates 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 its first system to go into service in 2027, but the Kerrisdale report highlights numerous technical and regulatory hurdles that may delay that schedule. Oklo is pursuing a new technology that it said will make its design safer and cheaper than conventional reactors in use today. The company’s design doesn’t have approval from the US Nuclear Regulatory Commission, a process that typically takes years.
Wall Street is split on the company thus far. Of the four analysts covering Oklo, two have buy-equivalent ratings and two are neutral. The average price target implies about 5% return from where shares are trading.
Besides Altman and Thiel, the company has another potentially high-profile connection. Board member Chris Wright was nominated by President-elect Donald Trump to lead the Energy Department last week.
(Updates stock move and adds company comment.)
