ACDC

ProFrac($ACDC) Officer Bets $420K in Consecutive Purchases Despite Stock Plunge, Signaling Insider Confidence Amid Financial Struggles

05/13/2025 22:26

ProFrac Holding Corp ($ACDC) officer Matthew Wilks has recently executed a series of significant share purchases over three consecutive days, according to SEC filings. Between May 9-13, 2025, Wilks acquired a total of 90,044 shares worth approximately $420,000, with purchase prices ranging from $4.24 to $4.94 per share. What makes these transactions particularly noteworthy is their timing, occurring immediately after $ACDC's stock price plummeted to the $4 range. ProFrac's shares, which were trading above $8 as recently as early April 2025, suffered a dramatic decline, falling from $6.68 on April 3 to $5.16 on April 4, and further dropping to $4.53 by April 7. This represents a steep 47% decline from levels seen a year ago. Despite this precipitous stock drop, insider buying at ProFrac has remained consistent. Matthew Wilks previously purchased approximately 80,000 shares worth $620,000 in November 2024, followed by a much larger acquisition of about 290,000 shares worth $2 million in February 2025. On that same February date, major shareholder Farris Wilks also bought approximately 340,000 shares valued at $2.35 million. Looking further back, major shareholder THRC Holdings, LP conducted an intensive buying campaign over a two-month period from August to September 2024, executing 17 separate purchases totaling approximately 3 million shares worth $18.7 million. According to footnote information, THRC Holdings is effectively controlled by Dan Wilks, suggesting that the Wilks family has been systematically increasing their ownership stake in the company. This pattern of insider buying stands in stark contrast to ProFrac's deteriorating financial performance. According to earnings previews released on May 5, 2025, the company is expected to report a 13.6% year-over-year revenue decline to $502.393 million for Q1 2025, with a projected loss of $0.32 per share. This continues a downward trend observed over several quarters. Financial reports indicate that ProFrac carries a substantial debt burden of $1.15 billion against a modest cash position of just $16 million. Revenue has declined by 17% year-over-year, with an annual net loss of $215.1 million. Profitability metrics are equally concerning, with a profit margin of -10.61% and return on equity (ROE) of -18.41%. Industry experts note that the energy services sector as a whole faces significant challenges. Volatile oil prices and reduced capital expenditures by energy companies have led to weakened demand for fracking services. Nevertheless, the company is focusing on improving operational efficiency and optimizing its service offerings to navigate through these difficulties. One positive development came in late April when Flotek announced the acquisition of mobile power generation assets and secured a multi-year lease providing a $160 million revenue backlog, potentially offering ProFrac a new revenue stream. Insider buying is typically interpreted as a positive signal, indicating management's confidence in the company's internal conditions. The consistent large-scale purchases by the Wilks family, even amid a steep stock decline, suggest they maintain strong faith in the company's long-term value and recovery potential. Analyst opinions remain mixed. The current consensus rating for $ACDC is 'hold' with no buy recommendations. The median 12-month price target stands at $7.25, suggesting a potential upside of approximately 47% from current levels. However, persistent performance issues and high debt levels continue to be significant concerns. In the months ahead, investors will closely watch whether ProFrac can improve its financial results and whether the pattern of insider buying continues. Despite the strong vote of confidence from insiders, the stock's recovery may be limited unless the company demonstrates substantial financial improvement.

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