Gevo, Inc. (NASDAQ: GEVO) is having yet another incredible start to the trading session in the market today. After a gain of more than 260% to close off the day yesterday, the stock continues to soar as excitement builds about new caps of isobutanol in gasoline for on-road use. Today, we’ll talk about:
- The news;
- why it’s such a big deal;
- what we’re seeing from GEVO today; and
- what we’ll be watching for with regard to the stock.
GEVO Continues Climbing On EPA News
As mentioned above, Gevo had a strong day in the market yesterday. When we picked them up early in the day with this article, the stock was only trading with a 29.06% gain, but by the end of the day, it was up by more than 260%. So, what’s the deal? It has to do with the United States Environmental Protection Agency.
In a press release issued yesterday morning, GEVO announced that the Environmental Protection Agency has approved isobutanol at a 16% blend in gasoline for on-road use. In the past, the maximum isobutanol allowed in a gasoline blend was 12.5%. This is important news as GEVO is focused on the production of isobutanol, opening the door to opportunity.
Why This Is Such A Big Deal
At the end of the day, GEVO sells Isobutanol, which is then blended with gasoline and sold to the public. Considering the fact that quite a bit more isobutanol can now be included in gasoline blends, the news gives the company the opportunity to expand its revenue. Not to mention, higher percentage blends come with benefits that will likely improve consumer uptake of isobutanol. In a statement, Patrick Gruber, CEO at Gevo, had the following to offer:
Blends of isobutanol at a 16% level have previously been used for boats and off-road applications. We congratulate Butamax in getting this registration done. We all benefit. 16% blend levels allow more RINS per gallon, high octane, and many other benefits. At Gevo we have been developing the markets for isobutanol containing gasoline, in particular to meet the demand for the “ethanol free” segment of the gasoline market. A 16% blend option will give our customers and partners an option for an even better product for on-road use.
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 causes moves. In the case of Gevo, the news proved to be overwhelmingly positive. After all, the news from the EPA gives the company an opportunity to substantially increase revenue. So, it’s no surprise that excited investors sent the stock screaming for the top yesterday and continue to do so today. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (7:57), GEVO is trading at $16.36 per share after a gain of $3.66 per share or 28.82% 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 company’s sales and revenue growth following the EPA approval of 16% isobutanol/gasoline blends. Nonetheless, we’ll continue to bring the news to you as it breaks!
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