Small Reactor Leader “Thrashed” in Stock Price Dive

I’m not a stock picker, but Motley Fool wrote this week that Small Modular Reactor company Nuscale stock has been getting “thrashed”. Which would not be good, as this is one of the industry’s leaders.

Seeking Alpha:

NuScale Power (NYSE:SMR) -10.5% in Friday’s trading and down 21% in the two days to an all-time low after short seller Iceberg Research released a negative report, saying “a fake contract and a major contract in peril cast doubt” on the company’s viability.

Earlier this month, NuScale (SMR) shares surged on news that Standard Power chose its small modular reactor technology to power two facilities it plans to develop, one in Ohio and one in Pennsylvania.

Iceberg said the contract has “zero chance” of being executed, since Standard Power does not have the means to fulfill contracts of such size, and said Standard Power’s managing director was found guilty of securities fraud in the past.

NuScale (SMR) has a “more credible contract” with the Carbon Free Power Project for Utah Associated Municipal Power Systems, but the company was given only until January 2024 to raise project commitments to 80%, or 370 MWe, from the existing 26%, or 120 MWe, or risk termination.

“We are three months to the deadline and subscriptions have not moved an inch,” Iceberg said.

NuScale (SMR) has ~15 months before its cash runs out, according to Iceberg, which said it expects further shareholder dilution, as “completion of the CFPP remains an iffy prospect with its constant cost overruns.”

NuScale’s (SMR) “delusional contract with Standard Power seems more like an act of desperation to shore up investor confidence, rather than a strategic move,” the report said, adding the company has “little to no value without government support. Even if that support continues, the DoE’s usual policy is that costs have to be shared with the private sector, meaning that existing shareholders will be diluted.”

NuScale (SMR) has not yet issued a response to the report, but Standard Power said it disagreed with Iceberg’s “unsubstantiated allegations” and “inaccurate information.”