B&W Shareholders Sue Over Alleged Contract Conflicts

Babcock & Wilcox told investors it had landed a transformational AI data center power deal worth over $1.5 billion. Then that story got even bigger, with executives raising it to a $2.4 billion contract and pointing to backlog and demand. But investors later learned allegations that cast the deal in a very different light.

In November 2025, B&W announced the initial AI power agreement and used the excitement to raise about $67 million through a stock offering. Shares surged nearly 200% over the following months. In February 2026, its largest shareholder disclosed the sale of roughly $10 million in stock near the highs. Then in March 2026, B&W announced the full notice to proceed contract, claiming it added billions to backlog and future growth.

But investors later learned the counterparty had deep ties to B&W's own largest shareholder, and Applied Digital could terminate its guarantee under certain conditions for as little as $50 million. A short seller report on March 12, 2026 alleged undisclosed ties behind the deal, and the stock dropped about 12% in a day.

Now, investors are evaluating their options.