Why Oklo Stock Tumbled by Almost 4% on Thursday

Key Points

• The company is upsizing a secondary stock offering.

• In the first phase of the issue, it offered $400 million worth of fresh equity.

• 10 stocks we like better than Oklo ›

Oklo (NYSE: OKLO) aims to raise more capital from a share issue than previously planned, and investors weren't too happy to learn this fact. This information, published in a regulatory disclosure after market hours on Wednesday, helped drive Oklo's stock price down by nearly 4% the following day. That was in a session where the bellwether S&P 500 index closed higher by 0.8%.

A $140 million boost

In the filing, a supplement to an existing sales prospectus, Oklo divulged that it was expanding its recent secondary common share issue to a total of just under $540 million. That means it's adding almost $140 million to the offering, under which it initially reaped gross proceeds of around $400 million by selling nearly 5.46 million shares.

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Image source: Getty Images.

As with the first portion of the issue, Oklo is selling the stock with the help of sales agents Bank of America Securities, Goldman Sachs, B. Riley, and TD Securities. Those companies are to earn commissions of up to 2.5% for their work.

In the supplement, Oklo wrote that it will use the net proceeds from the issue "for general corporate purposes, working capital and capital expenditures, and potential future investments." It did not get more specific.

Dilution danger?

As a next-generation nuclear energy technology, Oklo is having quite a moment these days, thanks in no small part to a top-down push for nuclear from the U.S. government. While it's encouraging that the company is essentially making hay while the sun shines, the specter of share dilution is giving investors pause -- even though the issue is relatively small, given the company's $10 billion-plus market cap.

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Bank of America 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 Goldman Sachs Group. The Motley Fool has a disclosure policy.