This Nuclear Stock Is Down This Month. Time to Buy the Dip?
Key Points
On Sept. 11, Oklo announced a $1 billion at-the-market equity offering, and a selling frenzy commenced.
The stock trades near its 52-week low, despite Oklo signing two landmark deals.
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In late August, Oklo (NYSE: OKLO) looked poised to launch a strong September. Indeed, by Sept. 8, the stock had risen over 12% for the month, as investors seemed more enthusiastic about nuclear stocks as a whole.
Then it all came crashing down last week.
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Image source: Oklo.
By Sept. 11, Oklo stock was trading about 9% lower since the start of the month. And unlike its brief rally, which lacked a definite cause, the sell-off does have something of a source. On Sept. 11, Oklo announced an at-the-market offering to sell up to $1 billion in stock. The news of the pending transaction pushed Oklo's share price down close to its 52-week low of about $36.
In one sense, the slump is justified. Oklo, at the moment, is operating mostly pre-revenue, without a commercial reactor or the licensing to operate one. But it carries a roughly $7 billion market valuation. Clearly, there's a disconnect between what Oklo is and what investors expect it to be, and when that disparity becomes clear, the pullback isn't really much of a surprise.
That said, Oklo's nosedive isn't a reason to avoid the stock. One person's trash is another person's treasure, as they say, and at $37, Oklo comes with a better-looking package than it did at its 52-week high of $193 a share. Indeed, since peaking at $193 last October, Oklo has struck a landmark deal with Meta Platforms to support the tech giant's 1.2 gigawatt nuclear campus in Ohio, signed a critical fuel-supply agreement with Centrus, and achieved first criticality at its Groves isotope test reactor.
Of course, plenty of risks remain, not the least of which is securing regulatory approval for its reactors. The timeline is uncertain, and further dilution could exacerbate investors' concerns. But for those willing to accept those risks, the lower price could make a small, speculative position more appealing.
Should you buy stock in Oklo right now?
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Steven Porrello has positions in Oklo. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.
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