NXE Stock Tumbles After Culper Research Reveals Short Position

• Culper added that the company’s targeted peak annual uranium production of 29.7M lbs is “impossible to achieve.”
• Culper also said that it believes NexGen's capital costs and construction timelines remain “materially understated.”
• The firm estimates that company insiders and their affiliates have sold $275 million in stock in the past 3 years alone.

Shares of NexGen Energy Ltd. (NXE) slumped as much as 10% on Friday after Culper Research announced a short position in the Canadian-based uranium exploration and development company.

Culper alleged that the net present value (NPV) of NexGen’s Rook I project is overstated by 43% to 62% and the company is “ultimately an insider enrichment scheme with substantial downside.”

It also added that the company’s targeted peak annual uranium production of 29.7M lbs is “impossible to achieve.”

Other Allegations

The Canadian company is focused on developing the Rook I Project in Saskatchewan’s Athabasca basin into the largest, low-cost producing uranium mine globally.

According to Culper, Rook I’s claimed C$6.3 billion NPV is underpinned by ultra-high-grade pods discovered a decade ago, by a single contractor, analyzed at a single laboratory. There was no twin hole drilling or secondary lab analysis, it said.

Despite uncovering supposedly the greatest uranium asset on the planet, NexGen’s original discovery team left the company, Culper said, while adding that this is “pretty unusual."

Culper also said that it believes NexGen's capital costs and construction timelines remain “materially understated.”

“The Company’s current 4-year construction timeline assumes near-flawless execution of a novel, complex underground mine plan at a remote, infrastructure-poor site in northern Saskatchewan,” it wrote.

However, CEO Leigh Curyer has “serially overpromised,” Culper noted, claiming as early as 2016 that NexGen would be in production “post-2020.” The Company now promises to be producing by 2030.

“We believe NexGen is, at its core, an insider enrichment vehicle masquerading as a uranium development company,” the firm said, while estimating that insiders and their affiliates have sold $275 million in stock in the past 3 years alone.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around NXE stock stayed within the ‘bearish’ territory over the past 24 hours, while message volume remained at ‘normal’ levels.

NXE has gained over 60% over the past 12 months. 

Read More: Why Did Healthcare Triangle Stock Plummet 20% Today?

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