Inside NuScale’s Alleged Phony Reactor Deal – National Radioactive Waste Coalition

Inside NuScale’s Alleged Phony Reactor Deal

Grace Phillips | October 30, 2023 devx.com

Nuclear energy startup NuScale is being scrutinized by attorneys after being accused of selling 24 reactors to an alleged “phony client,” as noted in a short-seller report by Iceberg Research. Earlier in the month, NuScale agreed to provide blockchain company Standard Power with 1,848MW of energy from 24 small modular reactors (SMRs) for two US-based data centers. However, the short-seller report implies the $37 billion agreement has “no possibility of being fulfilled,” leading to a roughly 10% decline in NuScale’s stock price. As a result of the allegations, NuScale’s reputation and potential future business deals may be impacted due to the erosion of trust. The attorneys investigating the matter are expected to conduct a thorough examination of the company’s business practices, and if the accusations are proven true, NuScale could face legal consequences and further financial losses.

NuScale’s Response

NuScale countered the allegations, asserting that Iceberg’s claims were conjecture and devoid of factual evidence, resulting in a roughly 6% recovery in share value. The company further emphasized its commitment to maintaining transparency and adhering to the highest safety and quality standards in their operations. This proactive response and assurance from NuScale helped regain investor confidence, reflecting positively on the company’s financial performance.

Iceberg’s Report Concerns

Iceberg’s report points out that Standard Power and NuScale’s business partner, Entra1, might be financially incapable of fulfilling the contract, among other issues. Furthermore, the report highlights concerns regarding the potential inability of both Standard Power and Entra1 to secure necessary funding to complete the project, thereby putting the project’s future at risk. This could lead to substantial delays or even cancellation of the project, ultimately impacting stakeholders and challenging the credibility of the companies involved.

Department of energy Backing

NuScale maintains that its financial position is stable and its SMR technology is prepared for commercial deployment, backed by the US Department of Energy (DOE). In fact, the DOE has given substantial support to NuScale, further solidifying confidence in their SMR technology’s capabilities and potential in the energy market. More recently, NuScale has also made strides in securing agreements with various utilities and power companies, demonstrating the growing interest in the implementation of this technology on a commercial scale.

Legal Investigations

Legal firms such as Howard G. Smith and Rosen Law Firm have commenced investigations into NuScale on behalf of investors for possible violations of federal securities regulations. These investigations have been initiated due to concerns that NuScale may have allegedly misled investors about the company’s financial position and business prospects. The law firms aim to determine whether the nuclear technology company has indeed violated any securities laws and to protect the rights and interests of the affected investors.

Stock Price Implications

NuScale’s overall stock prices have suffered a substantial decline of nearly 75% since their high point in late 2022, plummeting from around $14 to $3.5 per share. This significant drop has left investors concerned about the future prospects of the company and questioning the stability of their investments. NuScale’s management team has acknowledged the issue and is currently working on strategic plans to mitigate this downturn and restore investor confidence.

Conclusion

NuScale is facing allegations of selling reactors to a potentially phony client based on a short-seller report by Iceberg Research. The report has caused significant concern among investors and has led to legal investigations into possible violations of federal securities regulations. NuScale is working to address these allegations, reassure investors, and maintain a strong financial position. At the same time, the company continues to receive support from the US Department of Energy and secures agreements with different utilities and power companies, demonstrating the potential and interest in their small modular reactor technology.First Reported on: datacenterdynamics.com

Frequently Asked Questions (FAQ)

What is NuScale being accused of?

NuScale is accused of selling 24 reactors to an alleged “phony client” based on a short-seller report by Iceberg Research, leading to concerns about possible violations of federal securities regulations and negatively impacting the company’s stock price.

Leave a comment

Your email address will not be published. Required fields are marked *

.