NNE is an early-stage nuclear company founded in 2022, that wants to build the world’s first portable nuclear reactor. They also want to be a vertically integrated company that handles reactor design, nuclear fuel enrichment, transport, and consulting. Their market cap is currently around $1.1 billion, with an unknown number of employees (pretty sure it’s not 5 as reported by Robinhood).
The stock is currently up 600% since its May 2024 IPO around $4 (ATH was $48.5 / 1000%) - with only a small pullback relative to its volatility. That in itself isn’t unheard of for companies today (especially the 2021 IPOs/SPACs that got wrecked in 2022 to recover sharply in 2024). But what makes NNE stand out is how little they had in place at IPO: no patents, no prototypes, no regulatory progress, and no strong internal technical team. The founder has no nuclear experience and has been involved in some small companies in the mining sector that have gone nowhere. The CEO does have legitimate nuclear experience (UK DoD, Rolls-Royce), so that’s a positive.
Normally, companies need to put together an actual team and some IP before trying to raise big money. NNE did not seem to have any of these. A short-seller (Hunterbrook media) highlighted these deficiencies last year. The stock dropped for a bit, but then bounced back after NNE lawyered up with a big-name attorney and threatened to sue.
Since then, they’ve been trying to fix the optics by buying patents from other third-parties, hiring more PhDs and advisors, signing some agreements with other companies for far-dated future work, and applying for research grants with universities. But it still feels like they IPO’d first and are only now building the actual company.
For perspective, OKLO has been at this for over a decade and is only worth about 3x NNE’s market cap. Posts about NNE on r/nuclear have been pretty critical. Also, their timelines for getting a reactor built and approved are very unrealistic. Institutional holdings are about 30% (per Yahoo finance) as it meets the criteria for clean energy investment focused ETFs. Retail ownership is probably around 50%. I suspect that many OKLO and SMR retail investors have also invested in NNE without realizing it is a much more immature company in comparison to its market cap.
TL;DR – NNE might eventually build something good, but right now it looks way overpriced for where they actually are tech-wise. There is no reason for the stock to fall immediately besides macroeconomic factors that are less likely to reward risky ventures. This is why I am going with slightly longer-dated put options (October 17th - $32 puts). The premiums are indeed expensive, but the longer dates provide some protection in case the stock decides to rally for a short while with a macro-economic improvement. Planning to buy more puts in the following week based on price movement.
