Key Points
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Oklo continues to incur losses, burn cash, and issue shares to raise capital.
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Investor sentiment, however, could turn quickly as the nuclear energy start-up nears its goal.
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Oklo (NYSE: OKLO) stock is sinking after its first-quarter earnings, closing 6% lower on May 13 and falling further as of this writing. Investors saw what they feared: bigger losses and rising cash burn from a pre-revenue company.
To top that, Oklo also filed a new $1 billion equity offering, allowing it to gradually sell shares into the market over time at prevailing prices. In short, there could be further share dilution.
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The question is, if Oklo exited the quarter with $2.5 billion in cash and marketable securities and expects 2026 cash burn of only $80 million to $100 million, why does it want to sell shares worth another $1 billion?
Is this a sign of something worse to come, or could Oklo be preparing for the July 4 deadline that could send its stock soaring?
Image source: Getty Images.
Beyond Oklo’s headline numbers
Let’s pull up the quarterly numbers first.
Oklo is building fast-fission nuclear power plants called Aurora powerhouses that can run on fresh or recycled fuel to generate electricity. Since Oklo is still in the development stage, it isn’t generating any revenue.
The company, however, is spending large amounts of money on research and development and other operating expenses. Its net losses widened sharply to $33 million in Q1 from $9.8 million in the year-ago quarter. That includes an operating loss of $51 million, partially offset by interest and dividend income. Oklo also used $17.9 million in cash on operating activities during the quarter, up from $12 million a year ago.
As for the fresh $1 billion it plans to raise through share sales, Oklo says the proceeds will fund capital expenditures, future investments, and general corporate expenses. The new offering, however, could also mean that building nuclear plants is an expensive undertaking, and Oklo is building a sizable cash pile to meet those costs.
Where will Oklo stock be by July 4?
Oklo is a part of multiple nuclear programs of the U.S. Department of Energy (DOE). The DOE aims to have advanced reactors achieve criticality by July 4, 2026. Oklo has projects pursuing that timeline, including its Groves Isotope Test Reactor in Texas and the Aurora reactor at the Idaho National Laboratory.
The company is targeting criticality for the Groves project by July 4, 2026. Oklo’s newly acquired medical and industrial isotopes business, Atomic Alchemy, is developing the facility.
Criticality is essentially proving that its reactor can sustain a controlled chain reaction, and its success would serve as a technical validation that Oklo’s fast-fission design could work in the real world.
Meeting the July 4 deadline would also provide evidence that Oklo is staying on schedule and turning its ambitious plans into measurable progress.
Execution is critical for early stage companies. Oklo eventually aims to make money by selling electricity produced from Aurora, but that’s still years away. The company doesn’t expect to deploy its first powerhouse before 2028 .
In between, every regulatory approval, technical milestone, and contracts and partnerships, such as its recent collaboration with Nvidia, will be the catalysts for the stock.
In the coming weeks, if Oklo reports successful pre-criticality testing or remains on track for the July 4 test, the stock could easily reclaim lost ground.
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
