The Green Energy Panacea is here, or so the folks at Origin Oil told me in their website back in 2009 or so. I first saw the company mentioned in Time Magazine, in one of those “breakthrough technology” pieces they run every so often. I was intrigued by the idea; oil from algae, easily grown, processed, and refined, decentralizing energy production and giving just about anyone the tools to make their own cheap, clean energy. Who could say no to that?
Well, I couldn’t. I thought, this is a great idea! It’s a Free Market Solution to the looming disaster of Global Warming! I can get in on the ground floor of Planet Saving! I imagined the satisfaction of seeing those evil Oil Companies displaced by upstart Green Energy Guerillas, making cheap, clean algal oil everywhere in backyard stills and garages, every house a maze of plastic tubing, with Sweet Light Algae crude overflowing from buckets (but since it’s made from algae, the spills wouldn’t actually hurt anything. It would be like spilling a bottle of Wesson on the sidewalk) and the price of oil diving down to practically nothing. I also imagined the looks on the faces of Saudi princes, when their vast wealth began to dry up, forcing them to curtail their under-the-table payments to Osama Bin Laden. And lastly, but not leastly, I imagined rolling around in bundles of cash from the inevitable Origin Oil stock splits and share prices so high they kept bumping into the Hubble Telescope.
Planet Saved, Terrorism Defeated, and me with a bundle of money.
Imagination is a powerful thing. No one ever succeeded in business without having a good imagination. Think of the 19th century magnates like Cornelius Vanderbilt and John Rockefeller, or more contemporary versions like Gates, Jobs, and Bezos. These people all saw something no one else saw, and brought that thing to life, and then made torrents of money selling it to everyone else. They were also willing to risk losing everything to make it happen. I decided to join these intrepid industrialists, though I wasn’t quite courageous enough to risk losing everything. I decided that risking 600 bucks was good enough for starters. After a few quick keystrokes, I was the proud owner of around 2,000 shares of Origin Oil Stock. I was an owner, a bona fide Green Energy Pioneer. All that was left was to wait for the mad rush crowds clamoring for all that plastic tubing and Origin Oil technology, and I’d be rich and smug.
While imagination is indeed a powerful thing, it tends to break up like that sugar-glass they use in movies when it collides with reality. The visions of dividends and moral superiority that danced in my head managed to survive for a while, despite the flat or declining stock price. As I watched the six hundred dollars gradually drift down into the four hundred dollar range, I thought, give it time. They’re still just starting out. It takes time for people to adopt new technologies. I followed the daily fluctuations in OOIL stock, waiting for the inevitable Hockey Stick graph that would propel me into morally-acceptable riches.
Instead, what I got was something called a “Reverse Stock Split.”
Apparently, not that many people were interested in growing vast quantities of algae in their garages or backyard ponds to make their own fuel. And not that many big companies were interested in doing it on a large scale either. Furthermore, not that many stock exchanges were interested in listing companies whose shares were trading at roughly the price of a pack of gum. And if you’re not on one of those big exchanges, it’s really hard to get people to buy your stock. (Even if it’s in a company with a fantastic, Green Energy Solution to all the world’s problems.) The solution was to consolidate the shares at 30 to 1, which they called a “reverse split”. In 2011, my 2000 shares of Origin Oil became 66 shares.
My imagination suddenly became the crash-test dummy in the 4 door Reality Sedan. My 2000 shares, valued at 600 dollars at the time of purchase, became 66 shares worth about 30. Emails from Origin Oil assured me that I still owned the “Same proportion of the company”, which felt a lot like the Lets Be Friends Speech I’d heard so many times in High School.
I still own those 66 shares, which are currently trading at 26 cents a share, which means my imagination and Green Energy Vision has delivered a loss of five hundred eighty-two dollars. But there’s always a bright side.
Origin Oil has “expanded its focus” and is now busy adding its technology to machines that clean regular oil out of fracking water. As a side benefit, they’re also building machines to clean fish ponds to save the struggling aquaculture industry.
I know there’s a moral to this story somewhere, but I think Steve Maley would probably be a better candidate than I to write it. If it came from me, it would just sound like a guy kicking himself.