Gevo, Inc. (NASDAQ: GEVO)
Gevo is having yet another incredibly rough day in the market today. In fact, over the past 3 days, it seems like the stock has been spiraling out of control. Before I get into the story, I want to thank my friends Brad and Richard from StockTwits for trying to help me find the reason the declines are happening. With that said, I believe that I’ve pinpointed the problem. Here’s what I believe is going on with GEVO.
Trade smarter and make more money with Tradespoon!
Most Of This Is Speculation
First and foremost, I want to say that there have been no news releases. What I’m going to let you in on is my personal opinion. Unfortunately, I am not an insider. However, I did have a recent discussion with Dr. Gruber, the CEO of Gevo. This, in combination with something that Richard pointed out to me, leads me to an interesting conclusion. Nonetheless, this is, for the most part, me speculating, as I’ve searched and searched but can’t seem to find an answer.
Interesting Points From Richard And Brad About GEVO
As mentioned above, I’ve been going back and forth with two investors in regard to what’s been going on. Earlier today, Richard made a great point. Here’s what he sent me in an email:
“I haven’t found anything conclusive either. I thought it may have been an institutional holder but the largest holder has just 900K. I have watched trading closely and there large blocks hitting. As soon as the bid up ticks, they pound it. Very strange!”
Here’s another interesting point from Brad…
“I don’t know either…, so odd.
this is recent industry news….; and far from bad for Gevo…”
What I Gathered From The Last Discussion With Pat
The last discussion I had with Gevo’s own Pat Gruber was a great one. To read it, click here. In the conversation, what I believe to be one of the most important things that I gathered has to do with how the conversation has changed.
At this point, we know GEVO can survive. That’s no longer a question, and that’s great. However, the question has gone from how we get from surviving to thriving. At the end of the day, things are going in the right direction. However, for everything to get into full swing, the company needs more capital, as you would expect from a company in this phase of growth.
Responses After The Interview
As always, directly following the publication of the interview, my email and StockTwits feed blew up with responses. One of the big ones I saw time and time again was that investors were concerned about the idea that more public offerings were coming down the line. Not to mention that a reverse split is probably going to be the end result of the NASDAQ listing compliance issues. Of course, Pat didn’t discuss either one of these. What he did say to these topics was essentially that GEVO would be dumb to let themselves get delisted and that capital formation is a must.
Bringing It All Together
With large blocks of stock being sold at every uptick as Richard pointed out, it’s clear that traders are manipulating the heck out of this thing right now. However, this has to go deeper than that. There has to be an explanation for the stock giving up so much in the past three days.
While the news surrounding GEVO has been overwhelmingly positive, as Brad points out, I think investors are simply getting cold feet. It’s been a while since we got any new PR from the company. We know that capital formation is coming down the line sometime, and it’s likely to happen soon. With little by way of PR, investors are left to their imaginations with regard to how capital formation might happen. My hypothesis is that it started with day traders playing the game and taking their profits. On top of that, actual investors in the stock started to get cold feet as their imaginations weighed heavy. As a result, we’re seeing big blocks of stock flying out of the window.
Don’t waste your time! Click here to find winning trades in minutes!
Is It Time To Be Worried?
At this point, I maintain my opinion on Gevo. At the end of the day, the company has an incredible product and is heading in the right direction. Then again, I’m looking long term. Of course there are going to be risks when capital formation is a must. These risks are concerning to some investors, and that’s understandable. However, after my many talks with Pat Gruber, Shawn Severson, and others from the GEVO team, I honestly believe that the company has what it takes to get over the capital formation hurdle and thrive on the other side. It’s only a matter of time. However, in the mean time, we’re going to have good days, and we’re going to have bad.
[Image Courtesy of Pixabay]