Solaris Energy Infrastructure: How A Crumbling Texas Oilfield Services Company Gambled It All On A Convicted Felon And The World's Richest Man
Summary
- Solaris Energy Infrastructure, Inc. (NYSE: SEI) (“Solaris” or the “Company”) is a $1.65 billion Houston-based mobile power and oilfield services company that completed its IPO in 2017.
- From Q3 2022 to Q4 2023, Solaris reported 5 consecutive quarters of declining revenues, as its legacy business (oilfield services) was deteriorating. By January 2024, its share price had dropped to a multi-year low of $6.73 – ~44% below its IPO price.
- In July 2024, Solaris announced a turnaround plan involving the acquisition of Mobile Energy Rentals LLC (“MER”), a gas-powered turbine leasing business focused on “data center and energy customers.” Solaris projected that MER, now rebranded as “Solaris Power Solutions,” would drive ~$425 million in adjusted EBITDA by 2027, representing 80% of the entire company’s earnings.
- Solaris’s stock has skyrocketed 196% since the acquisition announcement, buoyed by market sentiment around the new Power Solutions division and its notable anchor customer – Elon Musk’s xAI data centers.
- According to Solaris, the Power Solutions division will be “guided by its founders,” who will steer operations. Solaris has assured shareholders that MER’s management team is made up of “recognized industry leaders” that have a “long and successful track-record” in mobile power generation.
- MER’s management consists of co-owners John Tuma (“Tuma”) and John Johnson (“Johnson”), who received ~16.5 million shares of Solaris stock in the deal, representing 24% of the Company’s outstanding stock. Those shares were subject to a lock-up period that expired 6 days ago, and are now registered for sale, creating a potential liquidity overhang.
- We asked a turbine industry consultant about Tuma’s reputation, and he told us that “[Tuma’s] reputation is not as a straight shooter. . . . I would be much happier if he wasn’t part of [Solaris] if I was investing my own money.”
- There appears to be a basis for the industry consultant’s viewpoint. Tuma was released from prison in 2017 after being convicted of environmental crimes in 2012. According to court documents and local reporting, he dumped an estimated 200,000 gallons per day of hazardous waste into Louisiana's Red River, obstructed a U.S. Environmental Protection Agency (“EPA”) investigation, and lied to the court “on multiple occasions under oath.”
- After his release from prison in 2017, Tuma founded Life Cycle Power (“LCP”), which was at the center of an $800 million gas turbine scandal in Houston that included allegations of bid rigging, corruption, and the inability to deliver the promised number of turbines, according to local media reports.
- The Public Utility Commission of Texas (“PUCT”) wrote that the Houston power company involved “didn’t do its homework” on Tuma, referring to him as a “disreputable executive” who had been convicted of “environmental crimes.” The former chairman of PUCT called the LCP debacle a “breach of public trust.”
- During the scandal, Tuma was ousted from LCP after its private equity backer accused him of self-dealing by siphoning cash to his privately-owned entity, KTR Management.
- After leaving LCP with a $54 million earn-out agreement, Tuma teamed up in Q1 2024 with Johnson, the owner of MER, a 2-year-old business that, at the end of 2023, was a ~$2.5 million revenue equipment leasing business based out of a condo with zero employees, no turbines, and no track record in the mobile turbine rental industry.
- With Tuma on board, however, MERS’s fortunes somehow changed. MER won a $39 million data center contract with Elon Musk’s xAI, per local media reports. MER acquired a fleet of turbines with a total capacity of 153MW and also secured the future delivery of new turbines, primarily through $71 million in debt financing and a $54.7 million “property and equipment” contribution from its owners. An industry expert told us that Tuma used his payout from LCP to acquire turbines, which he contributed to MER’s balance sheet.
- Despite MER’s limited operating history, in July 2024, Solaris announced it would acquire the business for $60 million in cash and ~16.5 million shares, while also paying off MER’s $71 million debt.
- Effectively, when the acquisition closed, Tuma and his partner had parlayed $54.7 million worth of turbines into a cash and stock windfall worth an estimated $246 million at the time and closer to $460 million today.
- Ultimately, Solaris doubled its leverage, paying 3.19x book value for a commoditized business with a sole data center customer. Despite Solaris’s claims that MER had a “diversified earnings stream” at acquisition, its 10-K revealed that 96% of turbine leasing revenue was driven by xAI during 2024.
- Solaris’s turbines at xAI’s Memphis data center are currently operating without air permits and could be shut down after operating for 364 days if they do not receive them, according to industry experts and local reporting. A turbine industry consultant told us the project was a “black eye” for the industry due to xAI using “very old turbines” that didn’t meet emissions requirements.
- The same consultant told us: “I know that just from talking with the CEOs of both those [Solaris competitors], both of them have just said, ‘Hey, look, we hate that project. . . . We do not want to touch it with a ten-meter pole and we're not going to do any work for that project.”
- The xAI turbines face intense opposition from environmental groups & Memphis citizens, driving other providers away from the project entirely, per an industry consultant who told us: “So far, no one’s shut them down yet, but if like, you know, one kid starts coughing…”
- In February 2025, a representative from the Southern Environmental Law Center told local media that xAI’s turbines were installed “without any oversight or notice to the impacted communities” and that they release “harmful pollution like formaldehyde and worsen Memphis’s ongoing problems with smog and poor air quality.”
- A Change.org petition related to the data center and its use of gas turbines has 6,500+ signatures and counting, and states that “xAI and Musk have violated Title V of the Clean Air Act with his gas turbines that have spread formaldehyde and other pollutants into the Memphis air…”
- In February, Solaris announced its largest contract yet – a deal to lease a minimum of 700MW worth of turbines to a second planned xAI data center. The contract details have not been released, but we believe this is for xAI’s recently announced Whitehaven site, also in the Memphis area, based on local reporting.
- Despite Solaris’s claim that the deal is final and a “long-term partnership,” xAI appears to be walking back its plans to use turbines at the new site after intense scrutiny from media and environmental groups. Less than two weeks ago an xAI site leader told local reporters that the use of turbines at the new site is “still to be determined.”
- Another risk to Solaris’s AI contracts is competition from the power grid. Memphis Light Gas & Water (“MLGW”), the local grid operator, is rapidly scaling capacity at both data center sites to meet demand, presenting a risk to the long-term need for Solaris’s mobile turbines. MLGW has called Solaris’s claims of its supposed inability to provide power to the data centers “categorically false.”
- Despite operating in a fiercely competitive and commoditized industry, Solaris has projected over 70% EBITDA margins for its Power Solutions segment (MER) over the next 5 years, per its proxy statement. It has failed, however, to disclose the significant costs necessary to sustain its power business and appears to have resorted to accounting tricks to boost near term profitability.
- Solaris’s mobile gas turbines are subject to major overhauls about every 4 years, often costing up to 50% of the cost to acquire the turbine, per multiple industry experts. Despite Solaris’s claims that it is building a capital reserve to cover overhaul costs, the Company failed to formalize and disclose the existence and amount of any such reserve in its annual reports.
- Solaris also appears to have inflated short-term profitability by depreciating its gas turbines assuming they have a useful life of 25 years. The founder of a Solaris competitor told us they were modeling 2.5 overhauls for their turbines and generators, implying a maximum useful life of 8.5 years for the type of turbines that Solaris operates. Similarly, Aggreko, another Solaris competitor, depreciates its equipment over a maximum of 12 years.
- As businesses start to fade and the specter of continued underperformance haunts top executives, public companies often desperately latch on to the hope of selling a “turnaround,” which is often sold as providing exposure to a megatrend such as AI.
- In Solaris’s case, this meant diluting shareholders and doubling leverage to acquire a felon-owned commoditized business at a wildly inflated valuation and binding its fate to one large data center customer facing mounting opposition to its use of turbines.
Initial Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Solaris Energy Infrastructure, Inc. (NYSE: SEI). Certain principals of Morpheus Research hold short positions in SEI, and Morpheus Research may profit from short positions held by others. This report represents our opinion, and we encourage every reader to do their own due diligence. Please see our full disclaimer at the bottom of the report.
Background & Basics: A Texas-Based Mobile Power And Oilfield Services Business That Reported Declining Revenue Throughout 2023, Driving Its Stock To A Multi-Year Low In January 2024
Solaris is a $1.65 billion mobile power and oilfield services company headquartered in Houston, Texas. It was initially formed in July 2014 as Solaris Oilfield Infrastructure and went public via IPO on May 17, 2017.
Solaris’s oilfield services business – its legacy business now termed its “Logistics Solutions” segment – “designs and manufactures specialized equipment,” providing “last mile and mobilization logistics services and software solutions” to oil and natural gas operators, per its most recent 10-K.
Starting Q3 2022, Solaris’s revenue started to contract. The Company reported 5 consecutive quarterly revenue declines from Q3 2022 to Q4 2023:
This declining quarter-over-quarter performance drove Solaris’s stock to a multi-year low of $6.73 on January 17, 2024 – 44% below its $12 IPO price:[1]
Based on the closing price on January 17, 2024, per FactSet. ↩︎
In February 2024, the Company acknowledged the slowdown in its legacy business, telling investors on its earnings call that it “expect[ed] a continued maturation of both our businesses.”
Further challenging the legacy business, Solaris is embroiled in an IP lawsuit related to its “top fill” system, a vital piece of technology that management says is used on 70% of job sites and results in “nearly doubling” earnings from those sites.
As detailed further in Appendix A hereto, a former vendor alleges Solaris stole their patented top-fill technology after buying a single system under the auspices of wanting dozens.
Bull Case: In July 2024, Solaris Announced A Turnaround Plan – The Acquisition Of MER, A Gas-Powered Turbine Leasing Business Focused On “Data Center And Energy Customers”
Solaris Projected That MER, Now Solaris’s “Power Solutions” Segment, Will Drive $400-425 Million In Adjusted EBITDA And 80% Of Solaris’s Total Earnings Once Its 1.4GW Fleet Of Mobile Turbines Is Fully Deployed In 2026
On July 9, 2024, Solaris announced the acquisition of MER, a company focused on providing “natural gas-powered mobile turbines” to “energy, data center and other . . . end markets.”[1]
Mobile gas turbines, such as the ones operated by Solaris, are rapidly deployable power units that can convert natural gas into electricity. With ever-increasing demand from power-hungry data centers, gas turbines can provide near immediate electricity where grid power is insufficient.[1]
Solaris completed the MER acquisition on September 11, 2024, renaming the merged company Solaris Energy Infrastructure Inc. and rebranding MER as Solaris’s “Power Solutions” segment.
In return for fixed monthly payments Solaris’s Power Solutions segment is now able to provide a turnkey service to install mobile turbines and distribution equipment to its end clients. [Pg. 8]
The acquisition has allowed Solaris to align itself with the AI megatrend, rebranding itself as a “power-as-a-service” business focused on AI data centers. To capitalize on that AI trend, the Company now expects to have a total operated fleet of 1,400 megawatts (“MW”) by 2027:
At a glance, the acquisition looks like a bargain for Solaris. After paying just $200 million in cash and stock for the business, MER is now projected to drive $400 to $425 million in adjusted EBITDA by the first half of 2027 – and 80% of Solaris’s total earnings once MER’s turbine fleet is fully deployed, as communicated by management on its Q4 2024 earnings call.[1]
In Q4 2024, Solaris reported total revenue of $96 million, representing a 28% increase from the previous quarter. The Company attributed this growth to MER’s first full-quarter contribution via Solaris’s Power Solutions segment, which generated ~35% of the Company’s total revenue. ↩︎
Bull Case: Solaris Power Solutions Boasts A Notable Anchor Customer – Elon Musk’s xAI Data Centers
As of December 31, 2024, 96% of Solaris’s Power Solutions revenue came from “a single data center customer” and the Company had “secured long-term contracts with this customer in the fourth quarter of 2024 and in the first quarter of 2025,” according to Solaris’s 2024 annual report.
Although Solaris hasn't identified this customer, it appears to be Elon Musk’s xAI. On January 10, 2025, a local Memphis news outlet reported that Solaris was a “vendor for the Elon Musk-founded AI company xAI.”
That article included the following picture of Solaris’s mobile turbines at xAI’s Memphis data center — which went live in July 2024 and was described by Musk as the “Memphis Supercluster:”[1]
In February 2025, during Solaris’s Q4 2024 earnings call, the Company announced that it had entered into a “long-term partnership . . . with an existing hyperscaler customer” to provide a minimum capacity of 500 MW for 6 years for a new data center.
Solaris’s Stock Has Skyrocketed 196% Since Announcing The Acquisition Of MER, Buoyed By Market Sentiment Around The Mobile Power Division
After the acquisition of MER, Solaris has attracted several favorable reports from lesser-known brokerages, including initiations of coverage from Texas Capital (Jan-25) and Janney Montgomery Scott (Feb-25).
All 7 brokerage analysts who track the stock currently have a buy or overweight rating, per Bloomberg. Solaris’s share price is up 196% since the MER acquisition announcement, with investors seeing Solaris as a beneficiary of the secular AI growth trend.
Part I: Solaris Acquired Mobile Energy Rentals (“MER”) From A Convicted Felon Whose Last Mobile Power Business Was At The Center Of An $800 Million Scandal Before He Was Ousted By Investors Amidst Allegations Of Self-Dealing
When a company makes an acquisitive pivot into a new business, investors and analysts closely scrutinize the sellers and/or new business partners. This is particularly vital in the case of Solaris’s MER acquisition, as management stated in the Q4 earnings call that MER’s former owners will be leading the new division:
Our Power Solutions business is guided by its Founders, who are not only steering operations but also mentoring the next level of talent. As recognized industry leaders, both bring extensive expertise in designing, installing, and managing electrical infrastructure.
Further, MER’s owners received ~16.5 million shares in the deal, representing 24% of Solaris’s outstanding stock. Those shares were subject to a lock-up period that expired 6 days ago, and are now registered for sale, creating a potential liquidity overhang.[1]
Despite its reliance on the MER team, Solaris hasn’t disclosed key information about them that we believe is vital to evaluate the suitability of the acquired company’s leadership.
Solaris CEO Bill Zartler Told Shareholders That He Has Known MER’s Management Team “For A Long Time” And That He Believes “The Cultural And Operational Fit” Between The Two Businesses Is “Highly Complementary”
MER’s Management Team Includes John Tuma, Who Received A 5-Year Prison Sentence In 2012 After Being Convicted Of Environmental Crimes And Lying To The Court “On Multiple Occasions Under Oath”
Today, Tuma Owns 12% Of Solaris’s Shares And Is Employed At Solaris As A “Senior Technical Advisor”
After announcing the acquisition of MER, Solaris’s management conducted a conference call to discuss the transaction. During the call, Solaris’s CEO said that (emphasis added):
We are very excited to have the MER team joining Solaris at closing. I’ve known the MER management team for a long time and believe that the cultural and operational fit between our two companies is highly complementary.
At the time of its acquisition, MER’s team included John Tuma, who is now employed as a Senior Technical Advisor at Solaris. Through Tuma’s entity, KTR Management Company (“KTR”), he was one of just 2 MER members, according to the contribution agreement executed between Solaris and MER on July 9, 2024.
The MER acquisition turned Tuma into one of the largest single holders of Solaris stock, with more than 8.11 million shares that, as of December 31, 2024, represented 12% of Solaris's outstanding shares.
While Solaris’s CEO told shareholders that he has known MER’s management for a “long time,” he failed to disclose that Tuma has a track record of fraud and corruption. As one industry consultant told us, Tuma has a reputation of not being a “straight shooter”:
No, he’s not a straight shooter. His reputation is not as a straight shooter. . . . I haven’t seen anything personally, let me put it that way. . . . but his reputation was enough that I didn’t want to have long-term dealings with him. . . . I would be much happier if he wasn’t part of [Solaris] if I was investing my own money.
In March 2012, Tuma was convicted by a federal jury for discharging an estimated 200,000 gallons a day of hazardous wastewater directly into Louisiana’s Red River. According to the U.S. Department of Justice, he was sentenced to 5 years in prison, followed by a 3-year probation and a $100,000 fine:
Specifically, the indictment alleged that Tuma was directly responsible both for instructing employees to bypass environmental monitoring systems and attempting to obstruct the EPA investigation.
Moreover, the Court found (emphasis added) that Tuma “was untruthful at trial with respect to material matters in [the] case. Specifically, Mr. Tuma lied on multiple occasions under oath about intentionally discharging untreated wastewater to the City of Shreveport and the Red River.” That transgression led the Court to increase the severity of Tuma sentence, according to the Court’s opinion. [Pgs. 81-82]
Tuma was released from prison in April 2017, according to the Federal Bureau of Prisons.
Solaris Told Its Shareholders That MER’s Management Had A “Long And Successful Track-Record Of Managing Power Solutions”
After His Release From Prison, Tuma Founded Life Cycle Power, Which Was At The Center Of An $800-Million Gas Turbines Scandal In Houston That Included Allegations Of Bid Rigging, Corruption, And The Inability To Deliver The Promised Number Of Turbines
Ross Bartley, Now Solaris’s EVP Of Power Solutions, Worked Alongside Tuma As Life Cycle Power’s CFO
When Solaris announced the acquisition of MER in July 2024, the Company said in a press release that “MER’s founders and management team will be fully-integrated into Solaris post-closing, leveraging their long and successful track-record of managing power solutions across a range of end-markets.”
Setting aside Tuma’s felony convictions, while he was involved in managing power solutions, but it’s difficult to see how that experience can be characterized as a successful track record.
While still under supervised release, Tuma founded Life Cycle Power (“LCP”) in 2018. Ross Bartley, another MER executive who now serves as the EVP of Power Solutions at Solaris, served as the CFO of LCP, according to his bio on Solaris’s Leadership page.
In December 2021, LCP was awarded an $800 million contract with Houston utility company, CenterPoint, for 500MW worth of gas turbines to “keep the lights on” in the event of an extended power outage, per the Houston Chronicle.
After winning the contract, Tuma’s team at LCP didn’t actually have the equipment or capital to fulfill the contract in a timely manner, per local media reports. Further, when Houston residents needed these generators most, they were reportedly unavailable:
Texas State Senator Phil King (“King”) has called the LCP turbines “useless” and called for CenterPoint to cancel its contract with LCP.
Despite being seemingly unprepared to deliver on the contract, LCP’s bid was reportedly 85% to 150% more expensive than larger and more qualified competitors, per an application made by Centerpoint before the state office – raising the question of how Tuma/LCP were able to win the contract in the first place.
Senator King has highlighted allegations that LCP won the CenterPoint contract based on an “inappropriate relationship” between an LCP salesperson and CenterPoint CFO, David Lesar (“Lesar”). In Senator King’s words:
We also now know the bidding process was exceptionally questionable, including very serious allegations of an inappropriate relationship with a former CenterPoint executive and an executive of [Life Cycle Power]. These allegations must be thoroughly investigated.
The Public Utility Commission Of Texas Stated That CenterPoint “Didn’t Do Its Homework” On LCP And Tuma – Its “Disreputable Executive” – While PUCT’s Former Chairman Called The Deal A “Breach Of Public Trust”
In a December 2022 report, the Public Utility Commission of Texas (PUCT) wrote that CenterPoint subsidiary CEHE “didn’t do its homework” on Tuma, which it stated had been convicted of environmental crimes (emphasis added):
CEHE contracted with Life-Cycle Power when its then-CEO had already been convicted of environmental crimes. … Had CEHE undertaken cursory research of LCP and its executives at the time, it would have likely discovered this fact. But CEHE did not discover that fact until later. Why did CEHE decide that LCP with its disreputable executive was within the range of reasonable options? CEHE didn’t decide that. And that was because CEHE didn’t do its homework.
Former Chairman of PUCT, Arthur D’Andrea (“D’Andrea”), called the deal a “breach of the public trust” while alleging that Tuma’s salesperson was able to effectively rig the bid based on her relationship as the personal trainer of CenterPoint’s then-CFO, Lesar. D’Andrea posted the following photo on LinkedIn of the employee and Lesar at a conference together:
While The Scandal Was Unfolding, Tuma Was Ousted From LCP After Its Private Equity Backer Accused Him Of Self-Dealing, Namely By Siphoning Cash To His Privately Owned Side Entity
Despite His Controversial Departure, Tuma Was Entitled To $54 Million From LCP Based On A 2020 Earn-Out Agreement
In June 2022, Tuma was fired from LCP by financial backer and majority shareholder, Goldfinch Energy Holdings (“Goldfinch”), according to a complaint Tuma filed against Goldfinch seeking damages for a breach of contract. Goldfinch counterclaimed that Tuma had engaged in a self-enrichment scheme whereby he leased generators to LCP at inflated rates from his own private entity, KTR:
Goldfinch subsequently alleged in an amended counterclaim that Tuma caused LCP to “make various other payments to KTR that either were not disclosed at all or that were for amounts that exceeded the amounts that had been disclosed.”
Despite Tuma’s controversial departure from LCP, his 2020 earn-out agreement resulted in Goldfinch owing him $54 million, according to a motion filed by an entity controlled by Tuma. [Pgs. 4-7]
While trying to collect his $54 million award, however, Tuma alleged that Goldfinch didn’t have the funds to pay him, and the two parties settled the debt confidentially in March 2024, according to a communication from the parties to a Court of Appeals in Texas.
Part II: How Tuma, A Convicted Felon, And His Partner Parlayed $54.7 Million Of Turbines Into $460 Million In Cash And Stock From Solaris
Tuma’s felony convictions limited his ability to access financing, according to a former Sales Manager of a gas turbine OEM who interacted with him after his release from prison. He told us that:
It was really hard for us at [redacted OEM name] to sell him anything because we couldn't get him financed because of his conviction.
Tuma was able to circumvent his lack of creditworthiness by joining MER, a small local equipment leasing business founded by Johnson just 2 years earlier.[1]
Johnson’s bio on Solaris’s website has a gap in his professional career from 2006 – when he sold Equisales – to 2022, when he co-founded MER. It appears that Johnson’s most significant endeavor between 2006 and the founding of MER in 2022 was his involvement in refurbishing a bed and breakfast inn (The Nordic Inn) in Crested Butte, Colorado, which was sold in 2016. Both the Nordic Inn and Johnson used the same PO box address. We also found Johnson’s profile on an online marketplace for industrial equipment. The profile was set up in 2022 and only showed listings for four industrial electrical components, with no turbines or generators listed. Additionally, Tuma and Johnson set up a seemingly dormant entity called Gas Turbine Rentals, LLC in April 2023 called Gas Turbine Rentals, LLC in April 2023. (1, 2) ↩︎
At The Time Of The Acquisition, Solaris Described MER As A “Premier Provider Of Distributed Power” That Provided “Natural-Gas Powered Mobile Turbines” With A Unique And Successful Team
Reality Check: As Of 2023, MER Was A ~$2.5 Million Revenue Equipment Leasing Business Based Out Of A Condo With Zero Employees And No Turbine Assets
Solaris announced its $200 million acquisition of MER in July 2024, referring to it as a “premier provider of distributed power solutions” and describing the company as a provider of “natural-gas powered mobile turbines.”
During Solaris’s M&A call, management insisted that the MER team was “unique” and had been “very successful” over a long period of time:
The MER team and the assets that they own and that we're procuring with that business are unique...
And so we're really excited to partner up with the MER team who has been very successful over a long period of time with deploying these assets into multiple markets.
Based on Solaris’s claims, we would have expected MER to have a track record of long-tenured employees deploying a fleet of mobile turbines.
MER appears, however, to have been little more than a shell company that didn’t own a single mobile turbine by the end of Q1 2024, according to its financial statements. MER reported just $2.46 million in revenue in 2023, primarily from leasing switchgear equipment rather than deploying mobile turbines. The company had total equity of just $5.3 million at the end of that year.[1]
Furthermore, Solaris’s proxy statement revealed that MER had no employees at the time of its acquisition by the Company and, in fact, never had any.
After Solaris announced the acquisition in July 2024, MER listed its “contact” and “principal executive office” address as 2929 Buffalo Speedway, Suite A1024, Houston, Texas, per an archived version of its website from August 1, 2024, and a proxy statement filed by Solaris:
This 2929 Buffalo Speedway address is a high-rise residential building in Houston, Texas, with unit number “A1204” being a 3-bedroom condo. The property is owned by Johnson’s son, Sean G. Johnson:
MER Transformed In The First Half Of 2024 – Winning Its First Data Center Contract, Securing A 153MW Fleet Of Turbines, And Placing Orders For New Turbines
The Turbines And Deposits For New Turbines Were Covered Through $71 Million In Debt Financing And A $54.7 Million “Property & Equipment” Contribution From Tuma & His Affiliates, Per An Industry Expert
The $71-Million Debt Was Paid Down By Solaris
Despite appearing as nothing more than a small, local switchgear rental business at the end of 2023, MER’s business seemingly transformed throughout the first half of 2024 – just months before it was acquired by Solaris.
By March 2024, MER had entered into a revenue contract with a data center worth $39 million that represented 16x its previous year revenue, according to its financial statements.[1]
The magnitude of the contract implies this was MER’s largest contract, since the company’s revenue for the first 3 months of 2024 was $2.4 million, according to its financial statements. At the time the acquisition was announced, Solaris CEO said “MER’s largest contract is with a recently constructed data center facility.” ↩︎
By June 30, 2024, MER had come into possession of $88.6 million worth of turbines, with another $42.3 million of new turbines on order, accounted for as “construction in progress,” according to its financial statements:[1]
Solaris’s 23-turbine 153-MW fleet was composed of 3 models of turbines manufactured by Solar Turbines, a subsidiary of Caterpillar, according to a company presentation from June 2024. It is unlikely that MER acquired these turbines in Q2 2024 directly from Solar Turbines. By March 2024, Solar Turbines was out of stock of natural-gas mobile turbines, and lead times were ~6 months, according to a sales agent from Solar Turbines. ↩︎
MER received some of these turbines via a $54.7 million “property and equipment” contribution from one of its owners. The remaining ~$71 million was financed through debt, according to MER financial statements as of June 30, 2024.[1]
In Q2 2024, MER reported $54.7 million in “property and equipment” contributions from its members in exchange for equity, as reflected on its equity account. It also reported an additional $33.7 million in “property and equipment” contributed to the company “accrued in accounts payable” – which it would owe to its members. ↩︎
The $54.7 million contribution from one of MER’s owner mirrors the value of Tuma’s pay out from Goldfinch, suggesting that Tuma may have used his payout from LCP to acquire more turbines and contribute them to MER.
An industry expert familiar with the deal told us that Tuma had gotten a “settlement” from LCP and that he plunged “all the money into an order” for more turbines.
At acquisition, Solaris paid down all of MER’s $71 million debt from its initial acquisition of turbines, according to a current report filed by Solaris on September 17, 2024. This indicates that Tuma and his partner’s primary contribution to the business was $54.7 million worth of turbines, as well as ~$5 million in assets from the legacy MER business.[1] (1, 2)
In 2022, MER members contributed $4,708,500 worth of property and equipment, and the company’s most valuable property at the time was $4.5 million worth of “switchgear equipment.” In 2024, MER members contributed $54.7 million worth of property and equipment, and the company’s most valuable property was $88.6 million worth of turbines. Neither Solaris’s proxy related to the merger or MER financial statements for the first 6 months of 2024 have any details about the history or condition of the equipment contributed to the Company by its members. ↩︎
At Acquisition, Solaris Paid Tuma And His Affiliate $60 Million In Cash And ~16.5 Million Shares, Worth ~$186 Million At Closing And Approximately $400 Million Today
Ultimately, Solaris Doubled Its Leverage To Pay 3.19x Book Value For A Commoditized Business With One Data Center Customer
Solaris’s acquisition of MER resulted in a significant windfall for Tuma and Johnson, the only two members of MER at the time the acquisition was announced.
Solaris paid $60 million in cash and 16.46 million shares – worth $186.4 million at the time of closing and closer to approximately $400 million as of the date of this report. The price paid significantly outweighs the value of the assets acquired, especially considering that Solaris immediately depreciated MER’s assets by ~$10.6 million upon acquisition.[1]
Solaris depreciated the fair value of MER’s property and equipment acquired by $12.7 million for the 9-month period ended September 2024, per the pro forma financial statements after the transaction. ↩︎
Solaris effectively doubled its leverage to acquire MER. Furthermore, the Company paid a rich book-value multiple of 3.19x for a business that offered little to no differentiation from its competitors. All this for a single data center relationship.[1]
MER’s acquisition was financed by issuing 16.46 million shares and a $325 million term loan. Solaris’s leverage ratio (Total Liabilities/Total Equity) doubled from 0.44 in Q2 2024 (pre-MER acquisition) to 0.90 in Q3 2024 (post-MER acquisition). MER’s total equity as of June 30, 2024, was $62.67 million. Solaris agreed to pay a purchase price of $200 million. ↩︎
Solaris Discloses That It Has A “Repair And Maintenance Facility In Buffalo, Texas” For Its Power Solutions Business That It Leased From A Tuma Entity
We Visited The Site And Saw No Signs Of Solaris; Instead We Found Signs Of “KTR,” The Related Party Tuma Owned
Solaris’s 2024 annual report states that its Power Solutions segment has a “repair and maintenance facility in Buffalo, Texas,” which it rents from an affiliate that appears to be a related party, KTR Management, an entity Tuma owns.[1]
On May 21, 2025, MER entered into a “long-term lease agreement with an affiliate” where the company was the lessee of certain commercial property. The 24-month agreement began on June 1, 2024, and ends on May 31, 2026, for a monthly payment of $18,000, according to MER’s audited financial statements. KTR is the lessor of this commercial real estate inherited from MER. ↩︎
While Solaris does not disclose the address of the Buffalo, Texas, facility, we were able to locate a facility that matches the description through local property and ownership records.[1]
We would expect a repair facility for a $1.65 billion public company to be a dedicated maintenance facility, with signage highlighting the public company’s presence to demarcate itself from the related-party owner of the site.
Yet during our visit to the site in early March 2025, we found no sign indicating this was a Solaris facility. Instead, we found multiple signage boards mentioning the related party KTR, as well as a mix of different machinery, some unrelated to Solaris’s business, including power generators, turbines, forklift trucks, tractors – and even an Avenger travel trailer:
We consider it highly unusual that a $1.65 billion public company, with the ability to generate $500 million in adjusted EBITDA, is unable to find a dedicated repair and maintenance site independent from a controversial related party.
Part III: Solaris’s Turbines At xAI’s Data Centers Are Operating Without Permits, Face Intense Local Opposition, And Increasing Competition From The Grid
At the time of the MER acquisition, Solaris told shareholders that MER had a “contracted and diversified earnings stream.” Solaris’s 2024 10-K revealed, however, that 96% of its Power Solutions revenue was derived from a single customer, which we have identified as xAI.
We believe that Solaris’s first xAI contract was for its Memphis, Tennessee, data center. In November 2024, the Company announced that this contract was extended under several agreements with a term of 2-4 years, according to Solaris’s Q3 2024 earnings announcement.
The second contract was announced in Solaris’s Q4 2024 earnings update for a separate, new xAI data center. The deal will be structured as a joint venture, according to Solaris management:
We've reached an agreement with this customer to provide a minimum of 500 megawatts for an initial tenor of 6 years for a new data center. And we are in the process of finalizing details of a joint venture arrangement with our customer to support this investment.
We believe the second data center is located in Whitehaven, Tennessee, at xAI’s newest site, based on media reports.
Extreme customer concentration is a risk for any business, especially when that customer is a known slow payer who has reportedly received multiple cut-off notices for failing to pay electricity bills. Beyond the concentration risk, however, our research uncovered several issues that could threaten the contracts’ profitability and long-term viability.
Solaris’s Turbines At xAI’s Memphis Data Center Are Currently Operating Without Air Permits, And Could Be Shut Down If They Are Not Received
A Turbine Industry Consultant Told Us The Project Was A “Black Eye” For The Industry Due To The Use Of “Very Old Turbines” That Didn’t Meet Emissions Requirements
As noted, the primary source of Solaris’s Power Solutions revenue is leasing mobile gas turbines to xAI’s Memphis data center.
According to the Southern Environmental Law Center, a non-profit organization, these types of turbines can emit harmful nitrogen oxides, giving rise to pollution concerns in Memphis, a hot spot for industrial air pollution:
‘Artificial intelligence may be a cutting-edge technology,’ says Amanda Garcia, a senior attorney with the Southern Environmental Law Center. ‘But it's imposing the same kinds of pollution burdens on communities that industrial sources have been for the past 100 years.’
The potentially hazardous output of these turbines requires that they operate under air permits – which xAI does not currently have, according to National Public Radio (“NPR”):
Alongside the factory are at least 18 portable methane gas generators, which visibly emit a steady stream of hazy smoke into the air. These turbines help fuel the company's AI.
The local county health department doesn’t require permits until the generators have been in place for more than 364 days, at which time xAI will be required to have a permit to continue operating the turbines, according to NPR.
The EPA may also have authority over the turbines, having recently stated that it is “looking into the matter.”
In January 2025, xAI affiliate CTC Property LLC applied for a permit to operate 15 gas turbines. It is unclear though whether or when the permits will be granted, according to the following statement the local county health department issued (emphasis added) in response to the application:
XAI has submitted an application for an air permit from the Shelby County Air Pollution Control Program. That application is currently under review by the Shelby County Health Department and EPA Region 4. SCHD Air Pollution Control is reviewing the application to determine if the turbines conform with EPA regulations. There is no set timeline for approval.
We interviewed an industry consultant familiar with the contract who told us that the turbines were not compliant with emissions standards – something that the Southern Environmental Law Center also appears to agree with, per reporting in Data Center Dynamics, an industry publication. Specifically, the consultant told us:
It’s very much a black eye for most of the, well ... call it, providers, you know, bridging power providers like Voltagrid and Life Cycle [Power], AMP and the others ... In part, because it was done with very old turbines that did not meet the required emission, the emissions requirements, they did not put the post emissions controls on them ... They got installed and are being operated without meeting those local air emissions.
When we reviewed the permit application submitted by xAI’s affiliate, sourced by the Guardian, we found that Solaris’s own reported controlled emissions exceeded those detailed in the New Source Performance Standards (“NSPS”), pollution control standards promulgated by the EPA:[1]
According to the NSPS, the NOx Emission limit is a crucial metric that regulates the amount of nitrogen oxides (“NOx”) that can be emitted from mobile gas turbines. xAI’s permit application for its Memphis data center project (p. 32) acknowledges that these standards must be adhered to. The application states that the “the NOx emission limit for each new turbine firing natural gas is 25 ppm at 15 percent O2 or 150 ng/J of useful output (1.2 lb/MWh).” ↩︎
Our industry consultant told us that Solaris’s competitors weren’t interested in touching the project with a “ten-meter pole:”
I know that just from talking with the CEOs of both those [Solaris competitors], both of them have just said, ‘hey, look, we hate that project. We, you know, it's a big black eye. We do not want to touch it with a ten-meter pole and we're not going to do any work for that project.’
As of February 14, 2025, the permit application was still under review, according to a statement issued by Shelby’s County Health Department in response to a local media article.
The Use Of Turbines At xAI’s Memphis Facility Faces Intense Opposition From Environmental Groups And Memphis Citizens, Driving Other Power Providers Away From The Project Entirely, Per An Industry Consultant
A Direct Competitor Told Us, “Elon Didn’t Bother Getting An Air Permit . . . So Far, No One’s Shut Them Down Yet, But If Like, You Know, One Kid Starts Coughing . . .”
The use of gas turbines at xAI’s data centers is becoming a point of contention in the Memphis community, according to a turbine industry consultant we interviewed, who opined that:
You have a CEO, Elon Musk, who certainly loves to be in the news, and is very clear that he doesn't really care about ramifications. He just does what he does, right. And so, you know, that project has moved forward, absent of meeting regulations, requirements, all that stuff. And it is certainly getting a lot, it's getting negative pushback from the community.
Consistent with that observation, we also spoke to an executive from a direct competitor who was familiar with the project who told us:
Well, if I’m honest, that [xAI] project, they have not been in compliance for the entire project. Elon didn’t bother getting an air permit. I think he just kind of was like, ‘I need to get this done’… So far, no one’s shut them down yet, but if like, you know, one kid starts coughing, and like, you know, finds out they’ve got emphysema or there’s smog in the area or something like that...
In August 2024, Reuters reported on this growing tension between xAI and the local community:
Elon Musk's AI startup, xAI, is facing criticism from environmental and health advocates for allegedly contributing to pollution in Memphis, Tennessee, by using natural gas-burning turbines at its data center without obtaining necessary permits.
According to NPR, multiple local environmental groups oppose the use of these turbines:
Garcia, Pearson and other environmental justice advocates fear that xAI will add to the pollution burden of this already overburdened community, because of its high demand for energy. They say it's particularly concerning that the project has had little government oversight and the community has been left out of the process.
In February 2025, Senior Communications Manager for the Southern Environmental Law Center, Eric Hilt, told local media that the gas turbines release harmful pollution to nearby communities:
These turbines have been running outside the South Memphis xAI facility since it began operations last summer. The company installed the turbines without any oversight or notice to impacted communities. The turbines release harmful pollution like formaldehyde and worsen Memphis’ ongoing problems with smog and poor air quality...
Also, in February 2025, one Memphis citizen even started a Change.org petition to remove Musk’s data center from the city entirely, based largely on pollution of nearby communities. The petition states that:
xAI and Musk have violated Title V of the Clean Air Act with his gas turbines that have spread formaldehyde and other pollutants into the Memphis air, endangering a community with respiratory issues 4xs greater than other communities...
They were able to circumvent regulations by placing these 18 gas turbines on mobile units and moving them around the leased site that houses the Colossus Supercomputer.
Despite Solaris Claims That It Has A “Long-Term Partnership” To Provide Turbines For xAI’s Second Data Center, xAI Appears To Be Walking Back Its Plans To Use Turbines At Its Whitehaven Site After Intense Scrutiny From Media And Environmental Groups
This Month, xAI’s Facility Manager Told Local Reporters That The Use Of Turbines At The New Whitehaven Data Center Is “Still To Be Determined”
In March 2025, the Daily Memphian reported that xAI was developing a new data center site in the South Memphis neighborhood of Whitehaven.
As mentioned, Solaris has claimed it has a new “long-term partnership” to lease turbines to a new data center owned by its “key customer.” xAI’s Head of Site Builds, Brent Mayo, told the Daily Memphian, however, that xAI chose the data center location based on its proximity to a local power plant, and that the use of turbines is still to be determined:
[The site] sits a few hundred yards from the Tennessee Valley Authority Southaven Combined Cycle Plant. The plant will provide a power source for the energy-intensive data center . . . . Mayo told The Daily Memphian on Friday, March 7, the site’s proximity to the plant was a reason the company chose it . . . . He said whether the company uses natural gas turbines as a power source is still to be determined.
While the local power utilities don’t yet have the capacity to service the two data centers, it appears as though they are rapidly scaling their infrastructure to do so.
Local Power Grid Operators Are Rapidly Scaling Capacity At Both xAI Data Center Sites To Meet Demand, Presenting A Risk To The Long-Term Need For Solaris Turbines
The Local Grid Operator Called Its Alleged Inability To Meet xAI’s Power Needs “Categorically False”
When Solaris acquired MER, the Company stated that MER’s solutions were “reliable and cost-effective,” whereas traditional grid power “may not be available or is unreliable.”
In July 2024, Solaris similarly stated that MER’s large data center customer needed turbines due to a “backlog” from the local grid operator, which couldn’t yet provide the power the data center needed:
MER's largest contract is with a recently constructed data center facility. While this data center is close in physical proximity to an existing power plant and distribution infrastructure, the backlog to connect to the grid introduces the need for a behind-the-meter solution, which could efficiently be dispatched in order to meet the customers' needs.
xAI’s permit application for turbines at its first data center argues that the local grid operator is “limited to 150 MW of electricity at the site,” necessitating the use of mobile gas turbines. [Pg. 7]
It appears, however, that the local grid operator took serious issue with those claims. A representative from Memphis Light, Gas & Water (“MLGW”), for example, called Solaris’s claim “categorically false,” providing the following statement to local news outlet, The Commercial Appeal:
MLGW is ready today to provide xAI with 150MW of power, but waits completion of infrastructure improvements identified in the MLGW study by the company. This will provide all of the power necessary for the originally proposed phase of the supercomputer.
On March 7, 2025, Commercial Appeal reported that MLGW recently completed its study on the scale-up to 300MW for xAI’s first facility located on Lowry Road, which is where Solaris’s turbines are currently being used:
xAI is currently building a 150-megawatt substation for its first phase under MLGW specifications. MLGW recently completed its study for a planned 150-megawatt expansion (300 megawatts total) for xAI's Paul R. Lowry Road facility.
MLGW is also conducting a study to provide 260MW to xAI’s Whitehaven data center, according to The Commercial Appeal.
If MLGW, the local grid operator, can successfully scale up its infrastructure to meet xAI’s needs, as it has said it intends to do, xAI may not need Solaris’s turbines as a long term solution, rendering the Company’s claims of a “long-term partnership" with this key customer obsolete.
Part IV: Solaris Management’s Failure To Disclose Costs To Sustain Its Power Business, Accounting Gimmicks To Boost Near-Term Profitability
Leasing off-the-shelf power equipment in a fiercely competitive and commoditized industry might seem like a low-margin endeavor. Not so according to Solaris, however, which projects its Power Solutions business will operate at over ~70% EBITDA margins over the next 5 years, according to projections from its proxy statement related to the MER acquisition.
Based on our interviews with Solaris’s OEM supplier, direct competitors, and extensive research on turbine maintenance and overhaul costs, we believe Solaris is downplaying significant costs associated with gas turbines that will materially impact claimed margin projections.
Solaris’s Mobile Gas Turbines Need An Overhaul Every 30,000, Or 3.5 To 4 Years When Running Full Time — The Cost Of This Overhaul Can Be 50% Of The Cost To Acquire The Turbine, According To Multiple Industry Experts
Despite Solaris's Claims That It Is Building A Capital Reserve To Cover Overhaul Costs, The Company Has Failed To Disclose The Actual Existence And Amount Of That Reserve
Solaris turbines are subject to “extended maintenance intervals” for an overhaul every 30,000 hours or 3.5 to 4 years, according to Solaris’s July 2024 investor presentation:
That 30,000-hour overhaul involves a full replacement of the main engine component, per a former Solar Turbines executive, and “literally they just yank it [the engine] out and put a new one in,” per a former executive at LCP.
Solaris’s management has acknowledged this overhaul requirement. During the conference call discussing MER’s acquisition, an analyst asked Solaris management about the “ongoing costs” of running MER’s units, i.e., turbines. Solaris's CEO affirmed the need for unit overhauls, saying (emphasis added):
You do have to overhaul these units every so often. And so we build in a reserve factor over a period of time to make sure that we cover that just like you would on any kind of piece of rotating equipment.
A Solar Turbines expert told us that, without such overhauls, turbines are at risk of “catastrophic failure.”
When we asked a former Solar Turbines executive how much a 30,000-hour overhaul might cost, they told us that “it's at least half of the unit cost. You can roughly predict for — and that would be a safe bet.”
Another industry expert in mobile gas turbines agreed that overhaul costs could be up to 50% of the unit cost, adding:
That’s the problem with turbines to me, is because somebody makes a big investment, they spend $6 or $7 million on the turbine, and then you tell them [in] 3 or 4 years you're going to have to spend another $3 million on this sucker.
With costs as materials as that, we would expect that Solaris would formally establish and disclose its “reserve factor” for heavy machinery such as turbines. Yet that is not the case. The Company's annual report doesn’t disclose any reserve created for the overhaul of its turbines – nor has Solaris even disclosed how much these major overhauls are expected to cost.[1]
We searched Solaris’s 2024 10-K for the term “reserve,” yielding 12 matches but none referring to maintenance of its equipment. We also searched for the term “provision,” which yielded another 28 matches, none referring to equipment maintenance. ↩︎
Solaris’s failure to disclose these costs contrasts starkly with industry peers. Evergy, an electric utility company with a capacity of 15,800 MW across its fleet, breaks down its “operating and maintenance” expenses associated with its equipment and has done so since at least 2019.[1]
Conveniently, when Solaris touts its business as being “high growth trading at a discount,” per its most recent investor presentation, it does so using estimates for 2027 – before it might have to shell out huge costs of overhauls, which would materially suppress its EBITDA estimates.
Solaris Depreciates Its Turbines Assuming They Have A Useful Life Of 25 Years — Inflating Short-Term Profitability
The Founder Of A Solaris Competitor Told Us His Company Was Modeling A Maximum Of 2.5 Overhauls For Turbines And Generators, Implying A Maximum Useful Life Of ~10 Years For Gas Turbines
Aggreko, A Direct Competitor Of Solaris, Depreciates Its Equipment Over A Maximum Of 12 Years
An easy way for a capital-intensive business to inflate its current period profitability is to extend the useful life of assets beyond that of peers and industry norms in order to lower yearly depreciation rates — as it seems Solaris is doing by choosing a 25-year useful life for its turbines and straight line depreciation method, according to its most recent annual report.
Given that Solaris’s turbines need extensive overhaul at least every 4 years, costing up to ~50% of the unit cost, the Company might have to spend more than the unit cost after 2 overhauls.In line with that assessment, the founder of a Solaris competitor with a fleet of gas turbines and generators told us that his Company was modeling for 2.5 overhauls as the maximum for its turbines or generators:
What we put into our model is, is, you know, we split the baby and then call it 2.5 [overhauls] on average in the aggregate.
Factoring in 2.5 overhauls, Solaris’s turbines should have a useful life of around 10 years. At the very least, we can see no justification for the claim of a 25-year lifespan.
Solaris’s accounting treatment also appears vastly out of line with global peers. For instance, Aggreko, a business specializing in “rental solutions covering power generation,” just as Solaris does, contrasts starkly in determining the useful life of its rental fleet.
By the end of 2020, Aggreko owned a fleet with a total capacity to generate 9,365 MW— including a 1,357 MW capacity from gas engines, according to its 2020 annual report.[1]
Aggreko disclosed an 8-12 year useful life range for its entire rental fleet:
This figure is less than half the useful life claimed by Solaris for its mobile gas turbines.
The disparity in how Solaris accounts for the useful life of its power generation units relative to peers suggests that the Company is doing so to inflate its near-term profitability.
We Estimate That If Solaris Used An Adequate Depreciation Methodology, The Depreciation Charge Associated With Its Turbines Would Increase By ~108%
We estimate that if Solaris used an adequate depreciation methodology, like its peer Aggreko, Solaris’s depreciation expense associated with its turbine fleet would be ~108% higher than its current charge.[1]
Estimation based on using a 12-year vs. a 25-year useful life depreciation expense. Since Solaris hasn’t reported a full year of operations for its Power Solutions segment, and its portfolio of turbines is expected to grow for the next 2 years, we can’t estimate the impact of one scenario against the other on the Company’s operating income. ↩︎
In short, we believe Solaris has resorted to accounting machinations to materially inflate its short-term profitability.
Conclusion: The Myth Of The Turnaround
As businesses start to fade and the specter of continued underperformance haunts top executives, public companies often desperately latch on to the hope of selling a “turnaround” – usually an unrelated business opportunity in a “hot” sector that can be pitched to Wall Street as the answer.
In the case of Solaris’s so-called turnaround, we believe that meant vastly overpaying for a commoditized rental business that had little to no operational track record, a mishmash of power generation assets, run by John Tuma – a known felon involved in a mobile power turbines scandal to whom the Company granted a significant equity stake and who Solaris now employs as an advisor within its own business.
From there, Solaris essentially bound its fate to the mast of one large hyperscaler customer with significant risks attached. To keep up the turnaround act, Solaris appears from our vantage point to have inflated short-term profitability through basic accounting games and remained silent on the actual cost of major overhauls of its lease equipment – and announced its largest deal while its suspected partner has publicly expressed doubts about the need for additional generators.
Unlike others, we did our homework on John Tuma. We believe that Solaris’s leveraged bet on him and a single data center contract, which is facing several headwinds, will not end well.
APPENDIX A
Solaris’s “Top-Fill” Sand Delivery System Is A Key Driver Of Its Logistics Solutions Business, Used On 70% Of Job Sites And Responsible For “Nearly Doubling” Earnings At Those Sites, Per Solaris Management
In December 2023, A Former Vendor Sued Solaris, Claiming That The “Top-Fill” System Was The Vendor’s Patented Invention, And That Solaris Had Stolen The Design Under The Auspice Of Wanting To Buy “Dozens” Of Systems
During the Q3 2021 earnings call, Solaris introduced its “top-fill” sand delivery system, an allegedly proprietary technology that can “revolutionize sand delivery with a new, faster alternative to sand loading at the wellsite,” per Solaris’s website. It is used at 70% of job sites and is resulting in a “near doubling” of earnings at those sites, according to Solaris’s Q4 2024 earnings call.
In December 2023, a former Solaris vendor, called Masaba Inc., filed a patent infringement lawsuit against Solaris alleging that the top-fill system was Masaba’s invention. The complaint alleges that Solaris originally approached Masaba in mid-2020 about designing and building a better sand delivery system, which it indicated it would buy “dozens” of:
Instead, Solaris purchased one system before "inexplicably" claiming that the cost was not “economically viable” and then proceeded to manufacture the system on its own, despite being aware that it was Masaba’s intellectual property, according to the complaint:
The case is scheduled to be tried prior to January 2026, and an IP attorney we consulted stated that Masaba has a relatively strong case, stating that “If Solaris has knowingly infringed on the patent (which seems to be the case), the damages may be tripled.”
While Solaris has technically disclosed the existence of the lawsuit, we believe the case represents an asymmetric, little-known risk to Solaris’s already struggling legacy business.
Disclosure: After extensive research, we believe the evidence justifies a short position in shares of Solaris Energy Infrastructure, Inc. (NYSE: SEI). Certain principals of Morpheus Research hold short positions in SEI, and Morpheus Research may profit from short positions held by others.
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