Flotek Industries, Inc. (NYSE:FTK) is primarily a supplier of chemical additives to the global oil & gas industry with some other ancillary oilfield service operations. The company has a proprietary product dubbed “complex nano-fluid (CnF)” that is proving to be extremely effective at increasing oil & gas shale well productivity. The company’s shares fell in the quarter following the assertion by a short-seller that independent consultant studies commissioned by Flotek earlier in 2016 were based on incomplete data and therefore the short-seller questioned the efficacy of the CnF product. In response to these allegations, the independent consultants referenced above later incorporated additional data and still reiterated their conclusions about the positive impact of CnF on customer well productivity. We expect Flotek’s shares to rebound as the company demonstrates that customer demand for CnF remains strong.
From Baron Discovery Fund's fourth quarter 2016 commentary.
