AllPennyStocks.com The Big Breakup: Why Companies Split for Clarity (and Profit)

Featured Company / Jericho Energy Ventures Inc.

Jericho Energy Ventures Inc.

Imagine a company that sells everything from razors to batteries to breakfast cereal. While diversification can be a good thing, for investors, it can create confusion. This is where corporate spin-offs come in. By splitting into separate companies, each focused on a distinct business line,  investors gain a clearer picture and potentially see more value unlocked.

Benefits abound sometimes by breakups. Companies can dedicate more resources and expertise to their specific markets, leading to improved innovation and efficiency. Further, each company can pursue its own growth strategies, attracting investors specifically interested in that sector, which lends to enhanced valuations, particularly for companies undervalued because of confusion.

Wall Street has handsomely rewarded many companies for taking this approach, allowing the sum of the parts to become far more than the original whole. Think about PayPal (NASDAQ: PYPL) being spun off by eBay (NASDAQ: EBAY) in 2015, where each company has thrived in their respective market. Last year, healthcare conglomerate Johnson & Johnson (NYSE: JNJ) announced a split into two companies. One, Kenvue (NYSE: KVUE) will focus on consumer health products like Band-Aid and Tylenol, while the other will handle pharmaceuticals and medical devices. This allows investors to choose which segment aligns more with their interests.

By strategically splitting up, companies can realize hidden value and create a clearer path to future success. That is the plan for Jericho Energy Ventures Inc. (TSX-Venture: JEV) (OTCPK: JROOF), a company that may be suffering from investor confusion about its business model.

Jericho’s legacy assets are conventional, producing oil and gas wells in Oklahoma. While there is nothing wrong with being an O&G play, it is somewhat conflicting with the company’s primary focus as an ESG play with exciting green hydrogen assets and a top-tier partner opening doors.

In short,  the oil and gas assets get lost in the hydrogen assets and vice-versa.

To that end, Jericho is exploring splitting into two streamlined and specialized entities, which could prove brilliant for the exact reasons others have done it before. The plan at this point involves shareholders of Jericho receiving shares of the hydrogen business upon spin-out.

In a recent interview with Tim Weintraut of Alpha Wolf Trading, Jericho Ventures CEO Brian Williamson touched exactly on this point, saying, “I think we have two phenomenal businesses and I think this is going to be an amazing opportunity for both. I think it’s overdue and we just need to execute on it now.” 

Shortly into the interview, Williamson quotes Ed Breen, the Executive Chairman of DuPont and a mastermind behind the breakups of Tyco International and DowDuPont into individual companies. Breen, who is a large shareholder in Jericho Energy Ventures, told Williamson, “the market likes simple, and our story is complicated.”

A fossil fuel company in the same portfolio as a leading green hydrogen (where renewable energy is used to separate hydrogen from oxygen in water) company can confuse, dissuade, and flat out prevent some investors from taking a position. Indeed, ardent ESG funds are not going to invest in even the most promising green hydrogen technology when it is accompanied by an oil well. 

The duality isn’t lost on Williamson who opines for a moment on cashflow drying up into small oil companies and that Jericho isn’t getting any of the energy transition capital or investment either because its exchange listings are as an oil and gas company.

The flip side of that coin is - and what investors often fail to recognize - is that the O&G assets are what have funded the development of Jericho to this point into a promising green hydrogen play.

The timing of the emerging importance of ESG (Environmental, Social, and Governance) from a niche concern to being woven into the fabric of the business world dovetails with the company’s decision to split. It also aligns beautifully with a partnership forged in October between Jericho and Superior Boiler for the manufacturing of the breakthrough, award-winning, zero-emission DCC™ hydrogen-fueled boiler developed by Jericho’s wholly owned subsidiary Hydrogen Technologies.

Founded in 1917, Superior Boiler is a go-to name in the industry for its portfolio of boilers trusted worldwide. The company’s website is telling, reading, “At Superior Boiler, we’ve set ourselves apart by investing in cutting-edge solutions that revolutionize industry norms.”

Superior has always stood at the forefront of the boiler industry and can now offer the DCC™ hydrogen-fueled boiler to its thousands of customers. Williamson says interest is brewing and that the hope is to ship the first one to a university currently using Superior boilers.

This is the foot in the door that companies dream of. The unnamed university currently uses 100,000 kilograms of steam per day. The DCC™ hydrogen-fueled boiler will supply 3,000 kilograms of that to begin, or 3% of total consumption. What can that grow to? Williamson doesn’t believe 25% is out of the question when the school realizes the incredible efficiency with no greenhouse gas emissions.

From there, the word should be out about the innovative boiler.

Williamson sees a big shift happening for his company and a major opportunity to unlock the value of the two portfolios. Management recognizes the need for consolidation in the oil and gas market, which is home to thousands of small players that will be stronger merged with others. Always focused on value creation, Williamson said, “[t]he oil and gas asset could be a dividend-oriented investment so that cash flow can go back to the shareholders.” 

Going forward, Jericho is keenly attuned to the fact that the largest growing pool of capital in the marketplace is focused on the transition to green energy. The company intends to dive into that pool. 

About AllPennyStocks.com:

AllPennyStocks.com Media, Inc., founded in 1999, is one of North America’s largest and most comprehensive small-cap / penny stock financial portals. With Canadian and U.S. focused penny stock features and content, the site offers information for novice investors to expert traders. Outside of the countless free content available to visitors, AllPennyStocks.com Pro (premium service) caters to traders looking for that trading edge by offering monthly stock picks, daily penny stock to watch trade ideas, market commentary and more.

As a result of its commitment to journalistic excellence and abundance of information in a particular area of equity investing (micro-cap investing) where there aren’t many credible sources of information, AllPennyStocks.com continues to have one of the largest audiences of micro-cap investors on the internet.

Corporate Snapshot:
Jericho Energy Ventures Inc.
Stock Symbol: JEV
Stock Exchange: TSX-Venture
Sector: Energy
52 Week High: $0.3300
52 Week Low: $0.1500

Current Stock Quote / Chart / News: Click here

Information as of May 08, 2024

Jericho Energy Ventures Inc.

Imagine a company that sells everything from razors to batteries to breakfast cereal. While diversification can be a good thing, for investors, it can create confusion. This is where corporate spin-offs come in. By splitting into separate companies, each focused on a distinct business line,  investors gain a clearer picture and potentially see more value unlocked.

Benefits abound sometimes by breakups. Companies can dedicate more resources and expertise to their specific markets, leading to improved innovation and efficiency. Further, each company can pursue its own growth strategies, attracting investors specifically interested in that sector, which lends to enhanced valuations, particularly for companies undervalued because of confusion.

Wall Street has handsomely rewarded many companies for taking this approach, allowing the sum of the parts to become far more than the original whole. Think about PayPal (NASDAQ: PYPL) being spun off by eBay (NASDAQ: EBAY) in 2015, where each company has thrived in their respective market. Last year, healthcare conglomerate Johnson & Johnson (NYSE: JNJ) announced a split into two companies. One, Kenvue (NYSE: KVUE) will focus on consumer health products like Band-Aid and Tylenol, while the other will handle pharmaceuticals and medical devices. This allows investors to choose which segment aligns more with their interests.

By strategically splitting up, companies can realize hidden value and create a clearer path to future success. That is the plan for Jericho Energy Ventures Inc. (TSX-Venture: JEV) (OTCPK: JROOF), a company that may be suffering from investor confusion about its business model.

Jericho’s legacy assets are conventional, producing oil and gas wells in Oklahoma. While there is nothing wrong with being an O&G play, it is somewhat conflicting with the company’s primary focus as an ESG play with exciting green hydrogen assets and a top-tier partner opening doors.

In short,  the oil and gas assets get lost in the hydrogen assets and vice-versa.

To that end, Jericho is exploring splitting into two streamlined and specialized entities, which could prove brilliant for the exact reasons others have done it before. The plan at this point involves shareholders of Jericho receiving shares of the hydrogen business upon spin-out.

In a recent interview with Tim Weintraut of Alpha Wolf Trading, Jericho Ventures CEO Brian Williamson touched exactly on this point, saying, “I think we have two phenomenal businesses and I think this is going to be an amazing opportunity for both. I think it’s overdue and we just need to execute on it now.” 

Shortly into the interview, Williamson quotes Ed Breen, the Executive Chairman of DuPont and a mastermind behind the breakups of Tyco International and DowDuPont into individual companies. Breen, who is a large shareholder in Jericho Energy Ventures, told Williamson, “the market likes simple, and our story is complicated.”

A fossil fuel company in the same portfolio as a leading green hydrogen (where renewable energy is used to separate hydrogen from oxygen in water) company can confuse, dissuade, and flat out prevent some investors from taking a position. Indeed, ardent ESG funds are not going to invest in even the most promising green hydrogen technology when it is accompanied by an oil well. 

The duality isn’t lost on Williamson who opines for a moment on cashflow drying up into small oil companies and that Jericho isn’t getting any of the energy transition capital or investment either because its exchange listings are as an oil and gas company.

The flip side of that coin is - and what investors often fail to recognize - is that the O&G assets are what have funded the development of Jericho to this point into a promising green hydrogen play.

The timing of the emerging importance of ESG (Environmental, Social, and Governance) from a niche concern to being woven into the fabric of the business world dovetails with the company’s decision to split. It also aligns beautifully with a partnership forged in October between Jericho and Superior Boiler for the manufacturing of the breakthrough, award-winning, zero-emission DCC™ hydrogen-fueled boiler developed by Jericho’s wholly owned subsidiary Hydrogen Technologies.

Founded in 1917, Superior Boiler is a go-to name in the industry for its portfolio of boilers trusted worldwide. The company’s website is telling, reading, “At Superior Boiler, we’ve set ourselves apart by investing in cutting-edge solutions that revolutionize industry norms.”

Superior has always stood at the forefront of the boiler industry and can now offer the DCC™ hydrogen-fueled boiler to its thousands of customers. Williamson says interest is brewing and that the hope is to ship the first one to a university currently using Superior boilers.

This is the foot in the door that companies dream of. The unnamed university currently uses 100,000 kilograms of steam per day. The DCC™ hydrogen-fueled boiler will supply 3,000 kilograms of that to begin, or 3% of total consumption. What can that grow to? Williamson doesn’t believe 25% is out of the question when the school realizes the incredible efficiency with no greenhouse gas emissions.

From there, the word should be out about the innovative boiler.

Williamson sees a big shift happening for his company and a major opportunity to unlock the value of the two portfolios. Management recognizes the need for consolidation in the oil and gas market, which is home to thousands of small players that will be stronger merged with others. Always focused on value creation, Williamson said, “[t]he oil and gas asset could be a dividend-oriented investment so that cash flow can go back to the shareholders.” 

Going forward, Jericho is keenly attuned to the fact that the largest growing pool of capital in the marketplace is focused on the transition to green energy. The company intends to dive into that pool. 

About AllPennyStocks.com:

AllPennyStocks.com Media, Inc., founded in 1999, is one of North America’s largest and most comprehensive small-cap / penny stock financial portals. With Canadian and U.S. focused penny stock features and content, the site offers information for novice investors to expert traders. Outside of the countless free content available to visitors, AllPennyStocks.com Pro (premium service) caters to traders looking for that trading edge by offering monthly stock picks, daily penny stock to watch trade ideas, market commentary and more.

As a result of its commitment to journalistic excellence and abundance of information in a particular area of equity investing (micro-cap investing) where there aren’t many credible sources of information, AllPennyStocks.com continues to have one of the largest audiences of micro-cap investors on the internet.


Forward Looking Statements

This report includes forward-looking statements that reflect current expectations about its future results, performance, prospects and opportunities. Jericho Energy Ventures Inc. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Jericho Energy Ventures Inc.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.

Disclaimer

AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for Jericho Energy Ventures Inc. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the company. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.

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