YB new stock pitches (Fri, Aug 22)

ProFrac Holding Corp ($ACDC) is a vertically integrated frac leader with 45 spreads, trading at $3.85 per share ($689M market cap, $1.75B enterprise value). The Wilks family, billionaires from selling Frac Tech for $3.5B in 2011, own 89%+ of shares after recently investing $20M in a discounted financing round at $4 per share (18.75M shares total). This financing caused the stock to drop from $6.10 to its current level, now down 45-50% year-to-date. ACDC is positioned to benefit from growing US LNG export capacity (expanding from 15 Bcf/d to 24.7+ Bcf/d). The company's vertical integration includes sand mines (Alpine Silica) and manufacturing capabilities, plus a 50.4% stake in Flotek worth $165-170M. Key risks include leverage (though most debt isn't due until 2029, with $350M tied to Alpine Silica), potential activity level declines affecting their fixed cost base, and the possibility of the Wilks family taking the company private.

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Energy Monster (EM) presents a bullish special situation with a 20% expected return in 3-6 months due to a buyout battle between an insider consortium led by CEO Mars Cai and Trustar Capital offering $1.25 per ADS versus Hillhouse Capital's competing bid of $1.77 (42% higher). Hillhouse owns 14.4% of shares and has significant leverage through Cayman Islands appraisal rights, which could force a fair value determination if the lower bid proceeds. The company operates a mobile device charging network with 9.6 million power banks across 1.28 million locations, generating approximately ¥200 million in annual EBITDA despite being currently unprofitable due to high legacy D&A costs, with projected non-GAAP operating income turning positive by 2027. The key risk is management entrenchment, as CEO Mars Cai and founders control 64% of voting power and could potentially refuse to cooperate with Hillhouse's offer, which is conditional on management rollover.

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LightPath Technologies (LPTH) presents a bullish picks and shovels play on the drone industry with two key verticals: drone cameras and counter-drone imaging equipment. Their proprietary BlackDiamond technology offers a significant advantage by eliminating dependence on China-controlled germanium. The company's counter-drone capabilities, enhanced by their February acquisition of G5 Technology, include LWIR (heat signature detection), MWIR (visibility through atmospheric disturbances), and multi-spectral imaging (reducing false positives). With potential revenue of $50-500K per installation for 360-degree coverage systems, LPTH has established important defense relationships, including a $2.2 million order from L3Harris for the Navy's SPEIR program (which includes counter-unmanned aircraft missions) and delivery of 'flightworthy hardware' for Lockheed Martin's U.S. Army missile program. The FY26 budget allocation for counter-UAV systems serves as a major catalyst that could drive defense primes to incorporate LightPath technology into their counter-drone systems, potentially causing a significant upward re-rating of the thinly-traded stock.

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