SNMP Stock: Here’s Why Evolve Transition Infrastructure Is Climbing

Evolve Transition Infrastructure LP (NYSEAMERICAN: SNMP) is flying in the market this morning, but if you’re looking for SEC filings or press releases, you’re not going to find any. 

Nonetheless, there’s a good reason for the gains. 

According to a press release from Northwest Advanced Bio-Fuels, there’s a strong chance that the company will see increased demand, leading to increasing revenues. Here’s what’s going on:

A New Deal Could Increase Revenue for Evolve Transition Infrastructure LP

As mentioned above, Evolve Transition Infrastructure LP is climbing for what seems like no reason. However, there is a good reason for the move. 

In a press release, Northwest Advanced Bio-Fuels, a renewable bio-jet fuel refineries developer, executed a MOU surrounding a strategic long-term investment surrounding sustainable jet fuels. 

The investment has a value of $600 million and will come from Stonepeak into the company. 

So, what does this have to do with Evolve Transition Infrastructure LP?

According to the MOU, SP Holdings will be involved in the fund raise. That’s important because  SP{ Holdings is the sole member of the general partner of Evolve Transition Infrastructure. 

As a result of the large investment, SP Holdings will likely push Northwest Advanced Bio-Fuels to use the company’s services. Keep in mind that Evolve is a limited partnership focused on the acquisition, development and ownership of infrastructure critical to the transition of energy supply to lower carbon sources. 

Considering the fact that Northwest Advanced Bio-Fuels is focusing on sustainable aviation fuel, or SAF, it will need the services offered up by Evolve, and with SP Holdings involved in the deal, the company will likely end up with the first right of refusal, setting the stage for revenue growth. 

A Short Squeeze in the Making

While this may set the stage for significant long-term gains, the short-term here is impressive too as we may be seeing the beginning of a short squeeze.

Not only does the stock trade with relatively heavy short interest, there are under 9 million shares of SNMP in the public float. That means that share supplies are overwhelmingly low. 

As a result, when short sellers begin racing to cover their positions, demand will climb, and with such short supplies of shares, that increasing demand could send the stock screaming for the top far and beyond what we’ve seen in the premarket so far this morning. 

Final Thoughts

The bottom line here is simple. Due to the funding and those involved in providing it to Northwest Advanced Bio-Fuels, we can expect that Evolve Transition Infrastructure has a new, loyal customer to look forward to. 

This, combined with heavy short interest and a low float, is leading to dramatic gains in the value of the stock, making SNMP one to watch closely. 

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