Shares of NuScale (SMR 4.03%) spiked on Tuesday, finishing up 4%, but gained as much as 11.9% earlier in the day. The rise comes as the S&P 500 and Nasdaq Composite lost 0.5% and 0.7%, respectively.
NuScale, a developer of small modular reactors (SMRs), is seeing its stock recover after a steep decline on Friday. A large shareholder is looking to sell a chunk of its sizable stake in NuScale.
Fluor is selling NuScale stock
Fluor, a major construction and engineering company and a major NuScale shareholder, is looking to convert 15 million of its Class B shares into Class A shares so that it can sell them. This is less about Fluor losing faith in NuScale and more about the extreme volatility of its stock and its effects on Fluor's accounting.
In its latest earnings, Fluor's position contributed to a massive mark-to-market gain. While that sounds great, the constant revisions that come from such an up-and-down stock complicate the company's financial picture for its shareholders.
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NuScale has a ways to go
There is a lot of excitement around SMR technology and nuclear energy in general. The unique approach could help power-hungry facilities that need to be independent from the grid, like artificial intelligence (AI) data centers, achieve those goals.
It is still an emerging technology, however, and comes with significant risk. NuScale is a leader in the space and makes a good pick for investors comfortable with substantial risk and able to stomach a whole lot of volatility.
