gevoGevo Inc (NASDAQ: GEVO) is having an overwhelmingly strong start to the trading session this morning. However, if you go looking for news that was released by the company, you’re not going to find any. That doesn’t mean that there’s not a very good reason for the gains however. Today, we’ll talk about:
- Why GEVO is flying;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why GEVO Is Flying
As mentioned above, Gevo is having an incredibly strong start to the trading session today, but the company hasn’t issued any press releases or SEC filings that would suggest such gains. So, what’s the deal? Well, it all has to do with President Trump.
At the moment, there are various stories surfacing suggesting that the United States President will lift a federal ban on summer sales of higher-ethanol gasoline blends. The announcement is expected to come this afternoon around 3:00 PM Eastern.
This is a big deal for GEVO and others in the biofuels space. After all, the U.S. Renewable Fuel Standard requires refiners to blend increased amounts of biofuels into the fuel pool each year. If they don’t, they must buy credits from companies who do.
However, prices for these credits have been volatile in recent years, leading to complaints for refiners. The Summer restrictions are there to taper back any supply issues of the biofuels that are required to be blended into the pool. However, if Trump does lift the summer ban, the restriction that keeps supplies up will be taken away, leading to high demand for biofuels, and ultimately higher prices. Because GEVO is a company that is focused on the production and commercialization of biofuels, this is great news for the company and its investors.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of GEVO, the news proved to be overwhelmingly positive. After all, if the ban on summer sales of high-ethanol gasoline is lifted, demand for the company’s biofuel will go through the roof. So, it comes as no surprise that excited investors are sending the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:25), GEVO is trading at $5.28 per share after a gain of $0.88 per share or 20.00% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on GEVO. In particular, we’re interested in following the story surrounding the lift of the ban on summer sales of high-ethanol fuel and how the lift affects the company’s bottom line. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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