Is BW a good stock to buy? We came across a bearish thesis on Babcock & Wilcox Enterprises, Inc. on X.com by @WolfpackReports. In this article, we will summarize the bears’ thesis on BW. Babcock & Wilcox Enterprises, Inc.’s share was trading at $16.54 as of April 20th. BW’s trailing and forward P/E were 6.47 and 140.85 respectively according to Yahoo Finance.
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Babcock & Wilcox Enterprises, Inc., together with its subsidiaries, provides energy and emissions control solutions to industrial, electrical utility, municipal, and other customers in the United States, Canada, the United Kingdom, Indonesia, and the Philippines. BW has surged approximately 75% following a press release announcing a purported $2.4 billion deal, but a closer examination raises serious doubts about the transaction’s legitimacy.
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The announced counterparty, Base Electron, shares the exact same Santa Monica address as Riley Corporation (RILY) and lists Bryant Riley as a director, raising immediate conflict-of-interest concerns. Base Electron was only formed in December 2025, after BW announced a limited notice to proceed for a supposed Applied Data (APLD) project in November, and despite BW describing it as a “subsidiary” of APLD, APLD itself repeatedly clarified that it is an independent company owning only 10% of Base Electron. This contradiction casts doubt on BW’s claims and the feasibility of the deal.
Further scrutiny of APLD’s upcoming data center projects in Louisiana and South Dakota indicates that BW’s services may not be used, with facilities expected to draw on grid power instead. Additionally, the project timeline has shifted from 2028 to late 2028, and now is omitted entirely, suggesting delays or uncertainty. Bulls may point to APLD’s guarantee of Base Electron’s obligations, but the guarantee dissolves if Base Electron raises just $50 million or goes public, creating an avenue for Bryant Riley and RILY to extract liquidity without fulfilling obligations.
Bryant Riley has already sold $10.4 million of BW stock at $9 per share. With RILY’s own substantial debt, the deal appears structured more to enrich insiders than to deliver operational value. Given the history of backroom deals and conflicts of interest, BW’s stock is facing material downside risk, with the announced transaction unlikely to create real value for ordinary investors.
Previously, we covered a bullish thesis on Northrop Grumman Corporation (NOC) by Daan Rijnberk in March 2025, which highlighted the company’s leadership in defense technologies, strong Pentagon and international backlog, expanding margins, robust free cash flow, and disciplined capital allocation. NOC’s stock price has appreciated by approximately 33.88% since our coverage. @WolfpackReports shares a contrarian view but emphasizes BW’s extreme deal risk, conflicts of interest, and potential insider enrichment rather than operational growth.
Babcock & Wilcox Enterprises, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 32 hedge fund portfolios held BW at the end of the fourth quarter which was 16 in the previous quarter. While we acknowledge the risk and potential of BW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BW and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
