Energy Edge Solutions Soaring On The Dry, Fried Wings Of A Chicken, Err, A Gourmet Chicken

We love all our posts equally, really we do. It’s just that some posts are more equal than others.  We take a guilty pleasure in writing up nanocap stocks that have decided to pursue a spinoff.  While we have seen many nanocaps with value(and we own significant stakes in several), we have yet to see a spinoff in a company of this size that contained any real value in either of the surviving companies.  So when Energy Edge Technologies(EEDG), with a market cap of just $2.56 million, announced on Friday that it planned to spin off Energy Edge Solutions, we got right to work.

Energy Edge Solutions, as you are almost certainly not aware, is a tiny, money-bleeding energy consultancy which helps companies optimize their energy consumption. Late last year, the company merged with the Dry Fried Wing Company, moved the energy business to a subsidiary and increased the ownership stakes of management in the subsidiary. Thankfully, the company did not insult us by promising synergies between the energy consulting business and the fried wing business. Now, just half a year later, the company is reversing the process. Sound and fury, signifying nothing? Nothing of value for shareholders, certainly.

Once the company spins off Energy Edge Solutions, it will rename its Dry Fried Wing Company subsidiary The Gourmet Wing Company and adopt that name at the parent company level. So the moribund energy consultancy doesn’t interest you? What about wings? Everyone loves wings! Especially these wings. After all, they’re “The San Francisco Sensation”. What? You’ve never heard of them? And you’re from San Francisco. Oh well, it was nicely alliterative. The wings aren’t a sensation in San Francisco, or anywhere else, really. New CEO James Boyd has been adept at promoting himself and dropping names. Getting Shaq to show up at an Atlanta pizza place where the wings were being served. Adding Dr. Ben Chavis to the Board.  A nebulous relationship he had with Goldman Sachs. For all his talk, the company has no restaurants, no franchisees, and no cash to build out a business. He’s suggested that they might buy an existing franchise business, but, again, hard to do without any cash. We were surprised to find that the stock has a very active message board.

We would stay away, lest Dry Fried Wings leave you high and dry.

Disclosure: The author has no position in any stock mentioned.