Oklo (NYSE: OKLO) inventory, a start-up producer of small modular (nuclear) energy reactors, surged 5.5% by midday ET on Friday — apparently on no excellent news in any respect.
Really, the alternative: Reviews out of Finland say a technical fault on the Olkiluoto Nuclear Energy Plant triggered one of many web site’s three models, “OL2,” to close down briefly at the moment.
Is that this dangerous information for nuclear energy traders? In that case, it is not terribly dangerous.
Information web site “Mezha” stories the “unplanned unavailability” of the reactor was associated to “an replace of the ability administration system software program” and will final not more than 16 hours. The reactor shut down when the fault was reported, and did so safely. Moreover, “the incident didn’t compromise the power’s security, and the opposite models on the plant proceed to function usually.”
I suppose traders might learn this information and suppose, “Nicely, something that is dangerous for conventional nuclear reactors could possibly be good for the adoption of SMRs as a substitute.” However you’d nonetheless extra seemingly count on an incident like this to spook nuclear energy traders than excite them.
From that perspective, Oklo’s 5.5% value enhance on the Finnish information most likely speaks extra to traders’ irrational exuberance about nuclear energy shares than to their right interpretation of whether or not the information was “good” or “dangerous.”
Oklo’s rising inventory value additionally would not converse extremely of traders’ capacity to correctly gauge the chance of investing in costly, unprofitable nuclear shares. With no income forecast earlier than 2027 and no earnings until 2030, there’s quite a lot of time for issues to go flawed for Oklo inventory, and no earnings or free money movement to assist it within the meantime.
Traders beware: This nuclear engine is operating solely on momentum.
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