Oklo: The High-Flying Nuclear Energy Firm Targeted by Kerrisdale Capital, Featuring a Trump Administration 2.0 Board Member

Please note that this article does not constitute investment advice. The author does not hold any positions in the stocks mentioned herein.

Investment Spotlight: Nuclear Fission and the Rise of Small Modular Reactors (SMRs)

Amidst the increasing energy demands driven by artificial intelligence and data centers, companies involved in nuclear fission, particularly those focused on Small Modular Reactors (SMRs), are receiving heightened interest from investors. Among these companies, Oklo has captured significant attention, particularly after recent developments linked to Kerrisdale Capital, a short research firm that has previously faced scrutiny for its tactics.

We’re short $OKLO. Report at https://t.co/IJ16XlZqog. $OKLO’s claimed unit economics are nonsensical, its mgmt are academics with weak real world commercialization experience, its tech / engineering team dramatically trails peers and its projected timelines are laughable 1/7

— Kerrisdale Capital (TradFi) (@KerrisdaleCap) November 20, 2024

Kerrisdale Capital’s Critique of October

Kerrisdale Capital has recently published a report shorting Oklo, presenting several critical allegations:

The company reportedly suffers from a “fundamental lack of design readiness and commercially unviable, unproven reactors.”
Kerrisdale disputes Oklo’s projected price of $7 per kilogram for HALEU (high-assay low-enriched uranium), suggesting a more realistic cost of $30,000 per kilogram.
The firm dismisses Oklo’s claims of deploying its first reactor by 2027 as overly optimistic.
Oklo’s choice of sodium-cooled reactors raises concerns due to historical reliability issues.
Kerrisdale warns of potential dilutive capital raises stemming from years of cash burn prior to generating revenue or profit.
The company has previously struggled to secure regulatory approval for its 1.5 MW reactor.

The Potential of SMRs

Small Modular Reactors are designed to deliver high energy density and reliable, zero-carbon electricity, thus proving beneficial for energy-intensive operations like data centers. Utilizing a controlled nuclear chain reaction, SMRs generate steam that powers turbines. Notably, Oklo is focusing on a sodium-cooled reactor as part of its commercialization strategy, following a broader industry trend toward the use of liquid metals as coolants.

As the demand for SMRs grows, access to low-enriched uranium (HALEU) has become increasingly problematic. This shortfall is partly attributable to sanctions against Russia, impacting supply chains significantly.

Shorting the company where Trump’s Energy Secretary is a board member? Thank you for the short squeeze https://t.co/S2DiHdnjoT

— zerohedge (@zerohedge) November 20, 2024

Regulatory Influence and Market Reactions

In a surprising twist, Oklo’s share price surged recently due to the appointment of a board member aligned with Trump’s administration as Energy Secretary. This development is believed to enhance Oklo’s prospects for expedited regulatory approval.

Let’s not forget their MSTR short https://t.co/C0KEx1iCXq

— zerohedge (@zerohedge) November 20, 2024

However, it is essential to approach Kerrisdale Capital’s shorter track record with caution, as the firm has previously taken a stand against companies like MicroStrategy (MSTR) and Carvana, with varying degrees of success.

As of now, Oklo’s shares have experience a minor decline of approximately 3 percent, despite being up nearly 100 percent year-to-date.

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