ProFrac lost $75 million in the second quarter. A few days later, insiders tied to the Wilks family bought roughly $4 million of ACDC stock. That is the kind of contradiction that gets my attention.
What happened
On August 10 and 11, entities tied to Dan Wilks bought 720,000 shares for about $3.62 million. An entity managed by CEO Matthew Wilks bought another 80,000 shares for about $402,000. Together, that is just over $4 million of open-market buying.
Why it matters
The timing is what makes this interesting. ProFrac is still losing money. But the business did improve from the first quarter. Revenue rose from $450 million to $498 million, adjusted EBITDA rose from $54 million to $69 million, and free cash flow improved from negative $25 million to negative $8 million.
What the market may be missing
Management says demand for higher-spec frac equipment is tightening and pricing increases are starting to show up in the third quarter. If that continues, the ugly numbers could keep getting less ugly. That may be what the insiders are betting on.
What could go wrong
ProFrac still lost $75 million in one quarter and free cash flow was still negative. Better is not the same thing as good. Oilfield services are also cyclical, and insiders can be very wrong.
The bottom line
I would not care nearly as much about one small insider buy. But roughly $4 million of buying right after another loss, while the operating numbers are starting to improve, makes ACDC worth watching.