Babcock & Wilcox stock drops sharply after short-selling firm’s report is released

LootboxPhobia · 2026-03-12T18:54:22+00:00

Babcock & Wilcox Enterprises Inc's stock price fell 9.6% after a short-seller raised questions about the feasibility of its $2.4 billion contract with Base Electron. The report pointed out that Base Electron has connections with B&W shareholders and questioned its financing and relationship with Applied Digital, suggesting the contract may not be fulfilled.

LootboxPhobia

2026-03-12 18:54:22

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Investing.com – Babcock & Wilcox Enterprises Inc (NYSE:BW) stock dropped 9.6% on Thursday after a short-selling firm released a report questioning the feasibility of the company’s recent $2.4 billion contract.

The stock declined following the report from a short seller, which claimed that the deal with Base Electron might not be realizable. The report emphasized that Base Electron shares the same address in Santa Monica as B&W shareholder B. Riley Financial (NASDAQ:RILY), with Bryant Riley serving as a director of Base Electron.

According to the short seller, Base Electron was established in December 2025, while B&W announced a limited start-up notice for a project in November. The report also pointed out conflicting descriptions of the relationship between Base Electron and Applied Digital (NASDAQ:APLD), with B&W calling it a “subsidiary,” whereas APLD describes it as an “independent” company, holding a 10% stake.

The short seller questioned whether APLD would use B&W’s services and noted that meeting records from projects in Louisiana and South Dakota indicate the company plans to use grid power. The report also stated that if Base Electron raises $50 million in financing or goes public, APLD’s guarantee of its obligations to Base Electron will be released.

Earlier this month, B&W announced that it received a full notice to proceed with a $2.4 billion design-build contract with Base Electron, which will deliver 1.2 gigawatts of new power capacity. The project includes four 300-megawatt natural gas boilers and steam turbine generators, intended to power Applied Digital’s AI factory campus.

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