A $1.5 Billion Reason Oklo Stock Closed Down Today

Oklo (OKLO) shares inched down on Friday as investors processed the nuclear-tech firm’s announcement of a $1.5 billion equity distribution agreement.

Investors reacted negatively to the capital raise because it dilutes their ownership stakes and creates a significant supply overhang that may hurt the company’s stock price in the near term.

Following today’s decline, OKLO stock is down some 40% versus its year-to-date high in October.

OKLO has a market cap of roughly $17.4 billion.

As evident, the $1.5 billion offering represents a substantial percentage of the company’s existing equity base, reinforcing that significant dilution awaits existing shareholders in the near term.

The Nasdaq-listed firm maintains an impressive cash reserve of about $920 million, but the sheer size of the fund raise signals significant capital requirements for its nuclear energy initiatives.

According to Barchart, options traders are also currently pricing in potential for a continued decline in OKLO shares to about $58 in the first half of next year.

That suggests potential downside of another 45% from current levels.

Earlier in December, Jensen Huang – the chief executive of Nvidia (NVDA) – said small modular reactors were essential to sustainably power artificial intelligence (AI) data centers.

Still, OKLO stock remains rather unattractive for the coming year due to its speculative nature and the fact that the Santa Clara-headquartered firm is unlikely to start generating any revenue before 2030.

The development of its Aurora small modular reactor technology and fuel recycling capabilities is burning cash at a fast clip, and the company has no operational reactors or commercial licenses at writing.

Additionally, OKLO has sunk below its 50-day moving average (MA), which suggests bears will likely remain in control in the near term.

Wall Street analysts seem to agree that much of the upside is already priced into OKLO shares at current levels.

While the consensus rating remains at “Strong Buy,” the mean target of nearly $104 is roughly in line with the price at which OKLO stock is trading at the time of writing.