NuScale Power Comments on Short-Seller Report

Rhea-AI Summary

NuScale Power (NYSE: SMR) has responded to a report by Hunterbrook, a known short-seller, released on July 29, 2024. The company strongly refutes the report's claims, characterizing them as an attempt to manipulate the stock market through sensationalized information. NuScale firmly states that the Securities and Exchange Commission (SEC) has not informed them of any current or potential investigation into the company. Furthermore, NuScale asserts that it is unaware of any grounds for such an investigation. This response aims to address concerns and maintain investor confidence in the face of potentially damaging allegations.

Positive

• NuScale promptly addressed the short-seller report, demonstrating transparency
• The company affirms no communication from SEC regarding any investigation

Negative

• Short-seller report may negatively impact investor sentiment and stock price
• Allegations, even if unfounded, could lead to increased scrutiny of the company

Insights

Financial Analyst

NuScale Power's response to the short-seller report is a critical development that warrants close attention from investors. The company's swift denial of any SEC investigation is a standard defensive move, but it's the underlying implications that are most intriguing.

Short-seller reports, while often controversial, can sometimes uncover genuine issues. In this case, Hunterbrook's allegations have forced NuScale to publicly address potential concerns, which could impact investor confidence. The lack of specific rebuttals to Hunterbrook's claims is notable and may leave some questions unanswered.

From a financial perspective, the immediate impact on NuScale's stock price is likely to be negative, as uncertainty tends to drive cautious behavior among investors. However, the long-term implications will depend on how thoroughly NuScale can dispel the allegations and whether any substantive issues come to light.

Investors should closely monitor for:

• Any follow-up statements from NuScale providing more detailed rebuttals
• Potential responses from regulatory bodies or major shareholders
• Unusual trading patterns or volume spikes that might indicate larger market players' reactions

While it's premature to draw conclusions, this situation underscores the importance of thorough due diligence in the small modular reactor (SMR) sector, which is still in its early stages and subject to significant regulatory and market uncertainties.

Legal Expert

NuScale's statement in response to the short-seller report raises several legal considerations. First and foremost, the company's explicit denial of any SEC investigation is a strong legal position. If accurate, this statement significantly reduces the immediate legal risk to the company.

However, the careful wording that the SEC has not communicated about being a "target" of an investigation leaves some room for interpretation. It's possible that informal inquiries or preliminary reviews could be ongoing without NuScale being formally notified.

From a legal standpoint, NuScale's response is measured and avoids making counter-accusations that could lead to defamation claims. This approach minimizes additional legal exposure while addressing the core allegation.

Key legal points to consider:

• The potential for shareholder lawsuits if the stock price experiences significant volatility
• The possibility of regulatory scrutiny, even if no formal investigation is currently underway
• The legal implications of any future disclosures that might contradict this statement

Investors should be aware that while NuScale's statement provides some legal clarity, it does not preclude the possibility of future legal challenges or regulatory actions. The company's handling of this situation will be important in maintaining its legal standing and investor trust.

Market Research Analyst

The short-seller report and NuScale's response highlight the volatile nature of the emerging SMR market. This incident underscores the heightened scrutiny faced by companies in innovative sectors, particularly those with significant market valuations relative to their current revenue streams.

From a market perspective, several factors are at play:

• Investor sentiment in the nuclear energy sector, which has been generally positive due to the push for clean energy solutions
• The credibility of short-seller reports in the current market environment, where retail investors have become more skeptical of institutional players
• The broader implications for the SMR industry, as NuScale is often seen as a bellwether for the sector

It's important to note that the market's reaction to such reports can often be disproportionate to their substance. In the short term, we may see increased volatility in NuScale's stock price and potentially in other SMR-related stocks.

Looking ahead, this incident may prompt:

• Increased due diligence from institutional investors in the SMR space
• Greater demand for transparency from companies in emerging tech sectors
• Potential shifts in investor risk appetite for pre-revenue companies in capital-intensive industries

While the immediate market reaction may be negative, the long-term impact will largely depend on NuScale's ability to maintain investor confidence and demonstrate progress in its technology and business model. This situation serves as a reminder of the importance of robust communication strategies in managing market perceptions in high-stakes, innovative sectors.

PORTLAND, Ore.--(BUSINESS WIRE)-- NuScale Power Corporation (NuScale or the Company) (NYSE: SMR) today issued the following statement in response to a report on July 29, 2024:

Hunterbrook is a known short-seller that has a vested interest in sensationalizing information to manipulate the stock market. The Securities and Exchange Commission has not communicated to NuScale that it is the target of a current or prospective investigation, and the Company is unaware of any reason for such an investigation.

About NuScale Power

Founded in 2007, NuScale Power Corporation (NYSE: SMR) is the industry-leading provider of proprietary and innovative advanced small modular reactor (SMR) nuclear technology, with a mission to help power the global energy transition by delivering safe, scalable, and reliable carbon-free energy. The company’s groundbreaking SMR technology is powered by the NuScale Power Module™, a small, safe, pressurized water reactor that can each generate 77 megawatts of electricity (MWe) or 250 megawatts thermal (gross), and can be scaled to meet customer needs through an array of flexible configurations up to 924 MWe (12 modules) of output.

As the first and only SMR to have its design certified by the U.S. Nuclear Regulatory Commission, NuScale is well-positioned to serve diverse customers across the world by supplying nuclear energy for electrical generation, data centers, district heating, desalination, commercial-scale hydrogen production, and other process heat applications.

To learn more, visit NuScale Power’s website or follow us on LinkedIn, Facebook, Instagram, X and YouTube.

Forward Looking Statements

This release may contain forward-looking statements (including without limitation statements to the effect that the Company or its management "will," "believes," "expects," “anticipates,” "plans" or other similar expressions). These forward-looking statements include statements relating to strategic and operational plans, capital deployment, future growth, new awards, backlog, earnings and the outlook for the company’s business.

Actual results may differ materially as a result of a number of factors, including, among other things, the Company’s liquidity and ability to raise capital, the severity and duration of the COVID-19 pandemic and actions by governments, businesses and individuals in response to the pandemic, including the duration and severity of economic disruptions; the Company's failure to receive new contract awards; cost overruns, project delays or other problems arising from project execution activities, including the failure to meet cost and schedule estimates; intense competition in the industries in which we operate; failure of our partners to perform their obligations; cyber-security breaches; foreign economic and political uncertainties; client cancellations of, or scope adjustments to, existing contracts; failure to maintain safe worksites and international security risks; risks or uncertainties associated with events outside of our control, including weather conditions, pandemics, public health crises, political crises or other catastrophic events; the use of estimates and assumptions in preparing our financial statements; client delays or defaults in making payments; the failure of our suppliers, subcontractors and other third parties to adequately perform services under our contracts; uncertainties, restrictions and regulations impacting our government contracts; the inability to hire and retain qualified personnel; the potential impact of certain tax matters; possible information technology interruptions; the Company's ability to secure appropriate insurance; liabilities associated with the performance of nuclear services; foreign currency risks; the loss of one or a few clients that account for a significant portion of the Company's revenues; damage to our reputation; failure to adequately protect intellectual property rights; asset impairments; climate change and related environmental issues; increasing scrutiny with respect to sustainability practices; the availability of credit and restrictions imposed by credit facilities for our clients, suppliers, subcontractors or other partners; failure to obtain favorable results in existing or future litigation and regulatory proceedings, dispute resolution proceedings or claims, including claims for additional costs; failure by us or our employees, agents or partners to comply with laws; new or changing legal requirements, including those relating to environmental, health and safety matters; failure to successfully implement our strategic and operational initiatives; risks related to provisions of our convertible preferred stock; and restrictions on possible transactions imposed by our charter documents and Delaware law. Caution must be exercised in relying on these and other forward-looking statements. Due to known and unknown risks, the Company’s results may differ materially from its expectations and projections.

Additional information concerning these and other factors can be found in the Company's public periodic filings with the Securities and Exchange Commission, including the general economic conditions and other risks, uncertainties and factors set forth in the section entitled “Cautionary Note Regarding Forward-Looking Statements and Summary of Risk Factors” in the Company’s annual report on Form 10-K for the period ended December 31, 2023, the Form S-1 filed on March 20, 2023, and declared effective on March 23, 2023, the Registration Statement on Form S-3 filed on June 1, 2023 and declared effective on June 5, 2023, and under similar headings in subsequent filings with the U.S. Securities and Exchange Commission. The referenced SEC filings are available either publicly or upon request from NuScale's Investor Relations Department at ir@nuscalepower.com. The Company disclaims any intent or obligation other than as required by law to update its forward-looking statements in light of new information or future events.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240729638412/en/

Investor Contact

Scott Kozak, Director, Investor Relations, NuScale Power

skozak@nuscalepower.com



Media Contact

Chuck Goodnight, Vice President, Business Development

media@nuscalepower.com

Source: NuScale Power

FAQ

What was NuScale Power's (SMR) response to the Hunterbrook report on July 29, 2024?

NuScale Power (SMR) refuted the Hunterbrook report, calling it an attempt to manipulate the stock market through sensationalized information. The company stated that it has not been informed of any SEC investigation and is unaware of any reason for such an investigation.

Is NuScale Power (SMR) under investigation by the SEC as of July 2024?

According to NuScale Power's statement, the Securities and Exchange Commission has not communicated to the company about any current or prospective investigation. NuScale also stated it is unaware of any reason for such an investigation.

How did NuScale Power (SMR) characterize Hunterbrook in its response to the July 29, 2024 report?

NuScale Power described Hunterbrook as a known short-seller with a vested interest in sensationalizing information to manipulate the stock market.