AOOR - Apollo Resources

This is an extreme speculation, based on a story that first appeared on Briefing.com late Wednesday afternoon and is now circulating on the message boards.

The story (read: opportunity) surrounds a pricing anomaly that apparently exists between two publicly traded companies. AOOR with a market cap of $55M owns 70% of EBOF which has a market cap of $400M. If this is accurate, then AOOR, which closed today at $0.69, includes about $2.74 of EBOF stock. This pricing disparity creates the potential for AOOR to quickly move toward that $2.74 value.

Here is the Raging Bull post that quotes Briefing's analysis:

from briefing.com: 15:18
AOOR Apollo Resources – An undiscovered play on bulletin board runner Earth Bio. (0.56 +0.06)


We believe that it's gone almost unnoticed (and it was unnoticed by us until today) that AOOR, an integrated natural gas and biodiesel company with a market cap of about $54.4 mln, owns the majority of Earth Biofuels (EBOF) of BioWillie fame, a stock that has more than doubled since we first wrote it up on March 15, and now has a market cap of more than $400 mln, based on about 180 mln shares out. We found the information in AOOR's most recent 10k, and called the companies to confirm the information. Executives just got back to us and confirmed with us over the phone that AOOR owns the majority of EBOF. The ownership works out to be roughly 70% of EBOF. BriefingTrader Note: Assuming no value for AOOR itself, 70% ownership of EBOF at its current stock price would imply a current value for AOOR's stake of around $280 mln, or more than 5x AOOR's current cap.

I established a core position Wednesday just before the close but before I could check out the story for myself. If everything holds together AOOR may run out of the gate Thursday morning at the Open. How far it will run and whether it will allow for a good entry is uncertain.

But you can bet (read: bet) that I will be playing in the mud in the morning.


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