SMR Stock Faces Volatility Amid SEC Investigation Rumors
NuScale Power Corp. (SMR) stock has experienced fluctuations over the past few days. Currently, the shares are trading at $8.76, giving the company a market capitalization of $2.26 billion. Over the last 52 weeks, the stock reached a high of $16.91 and a low of $1.81. While the company appears to be performing well overall, it has recently encountered some declines.
The SMR trading chart shows that despite maintaining a rising trajectory in general, the price has plummeted in the last few sessions. So, what caused the stock’s downfall? And will it rebound soon? Let’s find out.
SMR/USD 5-Day Chart
Why Is SMR Stock Dropping Today?
The shares are plunging because of the SMR stock news, negatively influencing investors’ sentiment. NuScale Power Corporation provides small modular reactor nuclear tech, offering users an innovative and advanced approach. The company aims to deliver safe and scalable energy that is carbon-free. That’s no small feat, and considering the importance of reliable and nature-friendly energy sources, the company’s value skyrocketed soon.
NuScale Power uses a first-of-its-kind SMR technology certified by the US Nuclear Regulatory Commission. This certification has helped NuScale attract a broad range of customers worldwide. The company’s nuclear energy solutions are ideal for various applications, including data centres, electricity generation, desalination, district heating, commercial-scale hydrogen production, and other heat-intensive processes.
As a result, NuScale quickly amassed a large customer base and reported strong revenues, driving its stock higher. However, recent developments have taken a negative turn. The US Securities and Exchange Commission (SEC) has begun investigating the company through its Division of Enforcement, which has caused NuScale’s stock to plummet by 15% overnight.
The stock is currently stable, but it shaved off many gains in the last few days. An open-source investigative reporting and media company – Hunterbrook, filed the request to investigate NuScale.
The SEC denied the media company’s request, leaving it unclear whether the commission has initiated an investigation. The SEC has the authority to conduct investigations without making them public. Hunterbrook, attempting to appeal the decision, received confirmation that the Division of Enforcement staff is indeed investigating SMR.
However, despite this confirmation, the agency refused to share any relevant information or documents with Hunterbrook.
How Did NuScale Respond to This News?
The company’s management declared that the media company isn’t reliable, and it often tries to manipulate the stock market by embellishing potentially sensational information. NuScale also stated that it’s unaware of any investigation, and the SEC has no reason to start one.
After the first wave of bearish trading, the SMR stock price recovered on July 15, 2024. It even managed to rally by 404% year-to-date. Some investors, knowing the company’s struggles asked: why is SMR stock rising? Their astonishment was well-founded, as the shares plummeted by 45% soon after that surge.
Despite NuScale’s defence, Hunterbrook’s complaint about the company failing to commercialise its nuclear reactors hit the stock hard.
The company reported a revenue of $1.4 million in the first quarter but suffered a $48.1 million net loss. Additionally, the firm had to cut the workforce by 28%.
Is SMR Stock Buy or Sell?
Even though this stock is declining now, it can soar if the SEC scandal comes to nothing. Top analysts recognise the importance of renewable energy, and NuScale’s small modular reactor (SMR) might well attract major investors if everything goes well.
On Friday, the company announced that while the SEC is not currently investigating it, they have received requests for additional information. The team is preparing to respond to these inquiries and plans to cooperate fully with the SEC.
Thus, a lot depends on how well the firm will defend itself and whether its report is true and believable. If it satisfies investors and dispels their fears, the stock price will rise again.
While NuScale suffered a significant net loss, it still has enough left to manage a full recovery. On the other hand, further negative reports might well sink the shares further.
Currently, analysts set the average price target at $11 for this stock for the following 12 months. The highest price target for SMR stock is $14, and the lowest is $8.
As you see, the SMR stock forecast implies that the shares might go in both directions – they either soar or plunge lower. Investors should be cautious and wait to see how this latest scandal fans out before taking serious action regarding this stock.
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