Amateurs should stay away

1. Current cash situation: The reality behind $1 billion to $1.3 billion

According to the earnings report at the end of February 2026, NuScale currently holds substantial liquidity amounting to approximately $1.3 billion (about 195 billion yen).

• Seemingly reassuring: With annual operating expenses (cash burn) at just under $200 million, this suggests they have 'enough to last about six more years'.

• However: Much of this cash was raised by aggressively selling new shares on the market in the second half of 2025 using an “ATM (at-the-market) program.”

2. Dilution risk: It's happening 'right now'

The answer to the question of whether there is dilution risk is that it’s not just a risk but an actual harm that is occurring as we speak.

• Setting up a $1 billion ATM: On February 26, 2026, they announced a new $1 billion-scale ATM (new share issuance) plan.

3. NuScale’s 'Inconvenient Truth'

• Huge payment to ENTRA1: In the fiscal year 2025, a massive payment of approximately **$500 million (about 75 billion yen)** is recorded for the partner company ENTRA1.

• Market distrust: Suspicions such as “Isn’t the money raised from shareholders merely being funneled to partner companies with opaque track records?” are fueling the ongoing class-action lawsuit (deadline: April 20).

1. The Difference Between 'Good Dilution' and 'Bad Dilution'

Whether investors can tolerate it depends on how the collected funds are **used**.

• [Good Dilution] (Offensive capital increase)

• Usage: Construction of new factories guaranteed to generate profits, acquisitions of promising companies (M&A), capital expenditures for already secured large-scale orders, etc.

• Result: Although the value per share temporarily decreases, the company’s overall profit (pie) grows even more in the future, ultimately leading to a rise in stock prices.

• [Bad Dilution] (Defensive or life-extending capital increase)

• Usage: Plugging losses, daily operating expenses (such as payroll), payments to opaque partners, litigation costs, etc.

• Result: The company’s profit (pie) doesn’t grow, but only the number of shares (the number of slices) increases. NewScale perfectly fits this category.

After a large amount of bad dilution occurs, even if the company's total value recovers to its previous level, the share price per share won’t return to its former high due to the sharp increase in the number of shares.

The most frightening aspect of this negative dilution isn't bankruptcy, but rather the 'salted away state' where the stock price may never return to its purchase value.

Miraculous Revival Scenarios

1. 'Direct Bailout' by a Data Center Company

The biggest weakness Newscale currently faces is that its construction costs are so high that it cannot be sold to 'ordinary municipalities (public utilities).'

• Path to success: An AI company (such as Microsoft or Amazon) that desperately wants **a stable power source emitting no carbon dioxide 24/7, 365 days a year,** even if the electricity cost is somewhat higher, directly invests in the project and signs a contract to purchase all the generated power.

• Current situation: It's still just a rumor, but if a single contract for a 'data center exclusive reactor' materializes, the stock price will rise again from the brink of death.

2. A 'Miraculous Settlement or Dismissal' of the ENTRA1 Lawsuit

It's necessary to dispel the 'suspected securities fraud' currently weighing down the stock price.

• Path to success: After the April deadline for plaintiff recruitment passes, the court determines that there was 'no deliberate falsehood by management,' dismissing the lawsuit or settling for an extremely small amount.

• Current situation: The outlook is very tough, but if the legal risk disappears, institutional investors could find a path to return and buy again.

3. “A Sense of Urgency Due to ‘Third Generation’ Technology”

• Path to success: In response to the desire from governments and large corporations wanting to build nuclear power plants immediately using proven third-generation technology, NuScale leverages its achievement as **“the company that obtained commercialization licensing the fastest”** to secure a surge in orders in other countries such as South Korea and Romania.

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