Answers: Wealthpin’s “Patriot Power Grid” and “Donald Trump’s Silent Wealth Window”

by Travis Johnson, Stock Gumshoe | September 23, 2024 1:01 am

Alex Reid peddles special report, "Patriot Power Grid: Target Profits From the Tiny Company About to Power the World."

What's the stock, and what's the story? Just read on and we'll explain...

Alex Reid[1] is out with an ad for his entry-level Wealthpin Pro[2] newsletter (“list price” $299/yr), and the bait he’s luring for subscribers is a secret stock that will profit from the “Patriot Power Grid”… so let’s dig in and see what he’s talking about…

He starts with this idea that President Trump “set the stage” for the “Patriot Power Grid” …

“Two Weeks Before He Left Office, Donald Trump[3] Set The Stage For A Wealth Window In The Energy Sector….

“Executive Order 13972. Have you heard of it? …

“President Trump set the stage for a new Golden Age of American energy independence…

“And at the same time, cracking open a radical wealth window …one that has the potential to turn a simple $500 starting stake into what could be a massive retirement[4] nest egg in the coming decade…

“Because hidden inside Executive Order 13972 lay the framework for a revolutionary new type of American energy grid.”

As with many such teaser ads these days, that’s of course an attempt to ride the coattails of political “fandom” — pretty much everyone either loves or loathes Donald Trump, so using his name and face and implying that he’s a savior in some way helps to instantly establish rapport with those who love him. And that’s the general strategy for financial newsletter marketing, because the core audience for most investment newsletters — affluent guys in their 60s and 70s who are interested in money and investing — also tends to lean conservative, and with marketing pitches like this you only get a few seconds to establish that rapport and get people to keep reading. Newsletters have used high-profile political “brands” — Trump, Obama, Clinton, Reagan, etc. — to make readers think they’re “on the same side” for 50 years, and it works pretty well.

I don’t care whether you wish to vote for Trump or Harris or someone else, assuming you’re a US voter, but please don’t let that decision drive your portfolio. Appealing to political division to get readers riled up is probably the easiest way for newsletter marketers and stock promoters to manipulate people into buying a newsletter or investing in a stock right now, and I promise you, it’s not going to do your portfolio any good in the long run if you follow those emotional impulses.

But I’ll step off the soapbox now, and we can see what actual stock Reid is talking about — it’s not so important how we learn about it, what’s important is what you think about the company in the clear light of day. Preferably without the biased baggage of having just paid money to reveal this “secret,” which usually makes people really, really want to like the secret stock they just paid to learn about. So we research it a little, get you started on how to think about the company, and let you make a call… free. Seem fair?

OK, first we check out the clues… what is this ‘Patriot Power Grid’ that Alex Reid is talking about? Here’s how he talks it up…

“I Believe That Starting as Soon as July 30, 2024, This Energy Grid Could Hand You the Chance to Turn a Simple $500 Stake Into what could Be A Retirement Nest Egg…

“I say that because we’ve seen previous energy revolutions spark some astronomical profits…

“This could quite frankly be the biggest energy revolution we’ve ever witnessed in America…

“Because the ‘Patriot Power Grid’ is an energy source unlike any other.

“It produces 73,000 times more energy than hydrogen[5]…

“750,000 times more energy than solar[6]…

“2,160,000 times more energy than lithium[7]…”

And then he throws in some more politics to keep you awake…

“… it’s not surprising that Joe Biden is currently piggybacking off of Trump’s vision for the ‘Patriot Power Grid’.

“Sleepy Joe’s administration is currently fighting hard to bring this new grid to life…

“So much so that three years after Trump signed the executive order…

[8]

“The Biden administration is finally bringing the ‘Patriot Power Grid’ online…

“Which is extremely convenient timing considering how close we are to the 60th U.S presidential elections.

“Biden’s cabinet has likely seen how much of a breakthrough the ‘Patriot Power Grid’ is…

“As well as how many “goodwill” points it can score ahead of the coming election.

“Silicon Valley fat cats and WallStreet bigwigs are also falling over themselves to grab a stake in the ‘Patriot Power Grid’…”

And he throws in the usual suspects among those who are “profiting from the rise” of the “Patriot Power Grid” — Bill Gates[9], Warren Buffett[10], Sam Altman, etc.

So what’s the back story?

Well, this is, as you’ve probably already guessed, yet another story about nuclear power[11], and about the potential “renaissance” of nuclear power that we might enjoy if the next generation of small modular reactors (SMRs) are approved and built and begin to really scale up to provide clean energy.

This all mostly started as a “demand is rising” story for electricity, led primarily by the sudden panic in 2023 about what power-thirsty AI data centers[12] would do to the power grid… but nuclear power has also been having a quiet recovery over the past decade or so, led by some SMR hopefuls and by the growing acceptance of nuclear reactors in much of the world, now that the fear of incidents like Chernobyl, Fukushima and Three Mile Island has faded a bit, technology has improved, and we’ve begun to more honestly weigh the risks of continued growth in carbon emissions against the risks of carbon-free, pollution-free nuclear power generation. Heck, we even saw a deal just recently to restart the undamaged reactor at Three Mile Island[13], with Microsoft signing up to buy the electricity.

And by design, at least, Small Modular Reactors will be much safer than large nuclear power plants, without the same meltdown risk that our old 1960s-design light water[14] reactors have to plan for, will be much cheaper and faster to build, since they can largely be built in a factory and assembled on site, and will run more efficiently, generating less nuclear waste. Nobody has really built any of them at commercial scale yet, with all the existing tests either hypothetical or confined to government testing reactors, but that’s the expectation — and the experts seem very convinced of that, so I’m willing to believe they’re right. Even if the first wave of SMRs is very unlikely to be “inexpensive,” and it will probably, we should assume, take a long time to scale up to speed and efficiency with this new manufacturing challenge.

And with every trend, of course, there are a few sexy startups and a hope for massive profits…

“The Patriot Power Grid has the makings of a first-of-its-kind energy revolution…

“One that could skyrocket America’s economy for years to come.

“So even a tiny stake could eventually grow into a nest egg in the coming years…

“Because, like I said earlier…

“According to my calculations, the Patriot Power Grid is set to unleash $51 Billion in new wealth…

“And if we position ourselves correctly, we have a shot to target a slice of that pie…”

Maybe. It’s true that the US government has been pushing for more nuclear reactor development in recent years, including with incentives-laden legislation last year which is providing some funding for new reactor development as well as funding to help keep old reactors on line… but it’s also true that the Nuclear Regulatory Commission has never moved very fast, prioritizes safety over all else, and the growing acceptance of nuclear power is not necessarily an endorsement that lots of Americans will want small nuclear power plants in their neighborhood.

So I think the future for new nuclear power plants, probably mostly SMRs, is probably the brightest it’s ever been… but there’s no guarantee that will continue to be true, and there aren’t any new civilian reactors being built just yet. Which leads us to worry a little bit about whether investor enthusiasm will remain high for the many years it will take to build a meaningful SMR business in the United States.

But now that you’ve had a taste of my caution, let’s hear some more hype from Reid about what his secret stock will do (or as we like to call this, “clues”):

“I’m going to fill you in on a little-known company that’s silently playing a big role in developing the “Patriot Power Grid”…

“This company currently has just 57-employees.

“To put things into perspective, Enphase has 2821 employees…

“And Plug Power has 3,861 employees…

“Which means this under-the-radar company is about 2% the size of energy giants like Enphase and Plug power…

“Yet, despite how small they are…

“They’re playing a key role in helping the ‘Patriot Power Grid’ go live…

“So much so that the company’s CEO has gone on record to say that he believes the company could provide ‘energy at planetary scales for a billion plus years.'”

What else do we learn about this stock?

“Open AI’s Sam Altman has bought into that massive vision.

“He recently helped the company raise $577 million…

“And off the back of that, this company has already struck a deal with the Department of Energy…

“Based on my experience, this kind of partnership isn’t typical for an energy company this small.”

Well, maybe… but it’s also true that nobody is doing any work on developing new reactors without a partnership with the Department of Energy. The government doesn’t just let folks mess around with uranium[15] however they want to, they pay close attention, and most experimentation and new reactor design and testing actually happens within DoE facilities.

So which stock does Reid like in this sector? Here’s a bit more from the ad:

“I’ve identified a low-key SMR play that if everything goes as planned, will be on track to potentially dominate the industry…

“And if you get into this company with as little as $500, I’m confident you’ll be getting in at the ground floor of the SMR trend…

“… if the trend gets bigger over time, like I expect it to…

“More investors will dive into it…

“And this influx of capital typically sends its share price flying…

“And if everything goes as planned, it will allow early investors to watch their early stakes grow into incredible amounts.”

That’s unusually honest — claiming not that the company will have surging profits, but that “more investors will dive into it” to drive up the price. What else?

“Firms across multiple industries are banging on this company’s door.

“You see, the demand for SMR tech is so high…

“My research suggests that this company has already amassed a pipeline of potential customers worth over $73,500… per hour! ….

“The US military also has this company in their crosshairs…

“With plans to harness their SMR tech to power the Eielson Air Force Base in Alaska…

“And the military isn’t the only government entity opening its chequebook for this company…

“Because the Department of Energy has awarded it four projects to the tune of $17.6 million.”

So who is it?

Well, as some of you will have already guessed — this is indeed Oklo[16] (OKLO), one of two “pure play” SMR startups who have gone public in the past few years through SPAC mergers. OKLO started trading just about six months ago, so they’re still the new kid on the block, but like the other public SMR startup, NuScale (SMR), they’ve been at work on their technology for more than a decade. And yes, they came public through the backing of OpenAI[17]’s Sam Altman, whose SPAC they used to begin trading (he was one of their major investors before that, too).

Oklo’s SPAC IPO[18] was completed in May, and they sell their “story” pretty well in quarterly investor letters (latest one here)[19], and they still say that they expect to deploy their first “powerhouse” (that’s what they call their SMR reactor installations) by 2027.

I have no idea how they think they’ll reach that 2027 date, which is currently the most ambitious promise among the US SMR projects — they haven’t even reapplied for a license yet, after having their first license application denied in 2022[20], and seem to be putting a lot of weight on the idea that they will benefit from a streamlined combined construction/operating permit application process which will cut the timeline in half…

[21]

I’m skeptical that this first attempt at a combined license will be anywhere near as fast as they hope, but that would still put potential license approval somewhere between the end of 2026 and the end of 2027… which doesn’t leave much time for construction.

Maybe they’ll be shockingly fast, we’ll see, it’s possible that some disruptor will emerge that delights the Nuclear Regulatory Commission, and that this disruptive new technology will be quickly approved thanks to the pressure on the NRC to streamline their review process, and that they’ll get their reactor built rapidly once approved… but this is a brand-new product design, and the NRC is one of the most independent and safety-conscious bureaucracies you can possibly imagine, for good reason, so counting on an application being submitted later this year being approved in time to build a reactor by 2027 seems, well, irrationally optimistic. At least to me.

Oklo is proposing to build a fast fission liquid sodium[22] reactor, not a water-cooled reactor — and there are some operating reactors using that basic technology around the world, particularly in Russia[23], along with the test reactors that have run for a long time at Argonne National Laboratory[24], but most of the commercial reactors in the world, and all of them in the US, are water-cooled, so this is a brand new reactor design for the NRC to approve. It may well be much better and safer than water-cooled reactors… but that doesn’t necessarily mean it will be fast or easy to license and build.

TerraPower is the widely talked-about nuclear power project being spearheaded by Bill Gates (with a little Warren Buffett on the side), and their planned Natrium reactor in Wyoming will be a fast fission reactor using liquid sodium, too, by the way, and there are others — and interestingly enough, TerraPower is the only one to have used this “Combined License” process with the NRC so far. They submitted an initial construction permit application to the NRC for the Natrium reactor, which launches the review of project safety and the environment impact of the reactor, and they expect those final evaluations to take about 26 months, after which there would be a hearing and a potential construction permit decision, presumably sometime after the scheduled final evaluations being issued in August of 2026. So that’s similar to the timeline talked up by Oklo… but with that, TerraPower has already begun the initial construction site prep work, (none of the actual reactor work), and TerraPower’s only prediction about the timeline at this point is that they “could begin operations by 2030.”

Of course, TerraPower is not publicly traded, and Bill Gates has deep pockets and good partners, so they don’t have to overpromise to keep investors excited. Maybe Oklo does.

I like Oklo’s idea, and hope it works out, but I’ll definitely take the “over” on a 2027 launch. I’d even give you pretty good odds against a 2030 commercial launch for their first “Powerhouse”, but that’s at least much more feasible — 2029-2030 seems to be the timeframe most of the new SMR projects around the country have in mind as a fairly optimistic “start operations” date. Oklo has made a lot of progress on potential power supply deals, they do have non-binding power purchase agreements with a big data[25] center in Wyoming, and with Diamondback Energy in Texas, among others, so those are possible deals which could be firmed up as construction seems more likely, and which might make the funding of these projects more feasible (along with all the government incentives rolling through to push for more new reactor construction), but those companies aren’t going to pay for power until the reactors are built… and it’s still hard to imagine any new reactor being fast or cheap to build in this first wave. Even reopening that closed reactor at Three Mile Island, a proven plant that operated safely for decades and uses the same 1960s design as most US reactors, will probably take at least three years and cost well over a billion dollars (the owner, Constellation Energy, estimates $1.6 billion and a restart “by 2028”).

Hopefully things will speed up eventually, once a few companies get a few reactors built we should have more of a regulatory blueprint, and some financing structures in place, and a supply chain of parts and fuel suppliers ready to streamline the process for these new modular reactor designs, getting to the point where we really can build the components in a factory, truck them to the site, and get a reactor built in just a year or two… that’s the promise of SMRs. But that’s not likely to be how it goes for the first few test projects.

What will all that mean for OKLO stock? Well, over the long run it probably mostly depends on what regulatory progress looks like, whether they get more government incentives, and what Oklo management says about the timeline and the eventual financial outlook for their reactors that actually get built.

In the short term, though it’s all about how excited investors get about the 5+ year opportunity. As with early-stage biotech stocks, regulatory progress and partnerships and headlines will probably be more important than actual financial results… but they do have to make sure they don’t run out of money while they push the approval process and try to get their first reactor built (and the next half dozen reactors at least into the planning process). They said in their initial SPAC presentations, a little over a year ago, that this first 15MW plant would have capital costs of $107 million, so they might have enough cash to get that going (about $235 million now, with an outlook that they will use $40 million this year), but if they want to try to scale up with other projects before that first plant is built, they’ll need to raise a bunch more money — not necessarily from selling stock, though that’s possible (they could borrow some, and they might get government grants or loans as the nuclear incentives begin to become available, or cash-up-front partnerships with potential large customers, like the cash-rich hyperscale tech companies).

And just to emphasize the point that nuclear power stocks are trading on sentiment these days, you might well have noticed that OKLO shares jumped about 25% higher on Friday… “soaring” all the way back up to where they were in early August, and now only down 20% from their SPAC deal price in May. Why? Well, it’s not because Oklo did anything… it’s because nuclear power got sexy again, at least for a moment, mostly because of that big Microsoft/Constellation Energy deal that made headlines on Friday morning — Constellation Energy (CEG)[26] is now planning to reopen one of the reactors at Three Mile Island in Pennsylvania, and that sent all the nuclear stocks soaring. There’s no direct connection to Oklo, of course, or to any SMR project or any of the other uranium or nuclear power stocks that surged higher on the day, but it got people excited about the industry again, and it signaled, again, that the big tech companies are willing to pay high prices for access to carbon-free electricity. (Constellation hasn’t actually applied for a permit to reopen yet, so there could be bad news in the future, too, especially if the folks in the surrounding area fight the reopening, and it will take years to restart if they do get permission.)

I suspect it was the symbolism of that announcement, more than anything else, which drew investor attention and dollars to the nuclear power stocks. The partial meltdown of one of the reactors at Three Mile Island in 1979, along with The China[27] Syndrome, the hit movie about a near-meltdown at a nuclear power plant which came out that same year, essentially turned the tide of US public opinion against nuclear power even before the accident at Chernobyl in 1986, leading to the 30-year pause in construction of new reactors in the US. So maybe this reopening of that ill-fated plant (well, the half of it that didn’t have an accident in 1979, at least), is a symbol of the tide of public opinion having turned back in favor of nuclear power again, which might help speed up the permitting and construction for all the new SMR hopefuls. The “story” is moving in the right direction, but we’ll probably need more “story” excitement to keep the SMR stocks fueled up over the next five years or so.

And yes, Reid notes, as other newsletters have claimed in the past, that the US Air Force has ordered a SMR from Oklo for a base in Alaska, also planned to be built by 2027. That was briefly true, about a year ago, but after a competitor complained about the lack of competition in that bid the order was rescinded last November[28], and procurement for that potential project remains “on hold” at this point. Which to me sounds like “definitely not by 2027,” even if Oklo does end up winning that contract in the end.

I wish Oklo the best, but with the uncertainty of the licensing and construction process this is too speculative for me, with revenue and profits still way too hypothetical, and too far into the future, and with a wave of a dozen other SMR hopefuls waiting in the wings to potentially create a competitive marketplace as SMR technology moves forward. Should be a very interesting five years, at least, for all of the SMR hopefuls (including some more that will probably come public if enthusiasm continues to heat up, as well as established nuclear industry players that have SMR programs or exposure to the potential growth of SMRs, like Westinghouse[29], GE-Hitachi, BWX Technologies, Rolls-Royce, the fuel fabricators like Centrus, and others)… but there will probably also be ups and downs, and we’ll see billions of dollar spent both by the government and by all these early-stage project developers, so it’s too early to have any clear view about the potential financial outcomes.

This is, as Reid implies, mostly best thought of as one way to buy a “pure play” company that’s a well-connected “early mover” in the business… and as we saw on Friday, that gives the stock extra juice when there’s a pop for the “nuclear renaissance” story. Operationally, it’s a slow-moving business, so to some degree OKLO investors will just have to be patient and keep their fingers crossed — but as we saw on Friday, it’s also a story-driven stock, including stories that have nothing to do with the company specifically, and that can create big gains or losses on any given day, if you happen to get the trading right (if any new reactor gets approved and begins construction, all the stocks will probably soar… if an accident occurs at any nuclear plant or there’s a rejection of any SMR permit, all the stocks will probably suffer).

Unless something surprising happens along the way, the next “news” moments for Oklo itself are likely to be when they provide their next quarterly update, probably in mid-November, and when they announce the submission, or at least the “pre-application readiness review,” of their combined license application, perhaps by the end of 2024, and maybe update their predicted timeline for potential construction… but this is very much a “story” stock, divorced from any near-term financial reality and focused on a business that might emerge over 5-10 years, so any surge or retreat in the investor enthusiasm for nuclear power and SMR development will be what moves the stock price in the near term.

Disclosure: Of the companies mentioned above, I own shares of BWX Technologies, Westinghouse owners Brookfield Corp and Brookfield Asset Management, and Warren Buffett’s Berkshire Hathaway. I will not trade in any covered stock for at least three days after publication, per Stock Gumshoe’s trading rules.

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