One of the hotter energy stocks of recent times cooled down on Friday. This is next-generation nuclear company Oklo (OKLO -1.16%), which provided details of a capital-raising effort it originally announced late Wednesday afternoon. Investors weren’t all that happy with this, and on Friday, they traded the stock down to leave it with a more than 1% loss in value.
Adding to the pool
After market hours Thursday, Oklo provided more information about the secondary share issue it disclosed the previous day. The issue has been priced at $60 per share, more than $4 below Thursday’s closing price. The company is to float nearly 6.7 million shares of its class A common stock, so the issue is set to raise gross proceeds of slightly over $400 million.
Image source: Getty Images.
The issue’s underwriting syndicate is led by Goldman Sachs and Bank of America Securities and includes Citigroup(C -2.45%)JPMorgan Chase’s J.P. Morgan, and UBS Investment Bank. The underwriters have been granted a 30-day option to collectively purchase up to 1 million additional shares at that $60 per share price.
The offering should close this coming Monday, June 16.
Despite recent successes, such as its receipt of a notice of intent to award (NOITA) a project on an Alaska base for the Air Force, Oklo is still at a relatively early stage as a company. As such, it continues to be hungry for capital to sustain its operations.
Dilution now… and in the future?
The downside of this, of course, is the dilutive nature of share issues. This one isn’t particularly so, as Oklo has more than 139 million shares currently outstanding. Still, it’s surely spooking investors who worry that there are more, and larger, share issues to come.
Bank of America is an advertising partner of Motley Fool Money. Citigroup is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bank of America, Goldman Sachs Group, and JPMorgan Chase. The Motley Fool has a disclosure policy.
GIPHY App Key not set. Please check settings