GEVO, Inc.

Gevo, Incorporated is a renewable fuels company.
The apparent objective of the company is to produce fuels that generate fewer carbon emissions.
I love it.
As a self-proclaimed Lover-of-the-World and Hoper-That-We-Don’t-All-Die-From-Climate-Change, I love it.

It kind of makes sense that bright eyed zoomers would jump on their Robinhood app and get all the confetti for buying a company that’s trying to save the world.

Yahoo Finance pins the float at 45.42 million, but StockstoTrade said it was 50 something million.

They ended yesterday (8/19/20) as a nanocap, priced at roughly $25 million.
Today, they are a microcap, priced at roughly $100 million.

They might be the first stock I’ve ever seen to trade a billion shares in a day.
A billion shares traded.
If that doesn’t smack you right in the sense of wonder, say it out loud.
A billion shares traded in one day.
In the words of Tim Bohen: Jeez-o-Petes!

Apple traded 36 million.
Microsoft traded 20 million.
Tesla traded 13.4 million.
Amazon traded 2.9 million.

But Gevo, Inc. traded –
Say it with me -
A billion shares.

Why?
Wtf? Why?

Fundamentals
Trades on the Nasdaq CM (OTC’s of the NASDAQ world).
Profit margin: -172.53%
(what percentage of sales is turned into profits)
Return on assets and equity: both negative.
Quarterly revenue growth: negative.

Look, they’re not making any fucking money.
They’ve got $16m in debt and $6m in their pocket.
(kinda know how that feels… student loans…)
I’m starting to think the fundamentals don’t matter much.

Quarterly earnings report 13 days ago – no activity.
From that report, we glean:
They got a loan from Citigroup.
There’s an offering (with warrants) on July 6
-those warrants are exercisable at 60 cents-
They converted some secured notes into 4.2 million shares of common stock
(that could be a forecast!)
They didn’t make as much in q2 as in q1.
Their shares lost a lot of value.
yadayada

I think some key clues here are the “completed” offering,
The sale of warrants totaling 16.5 million dollars,
and the conversion of notes into common stock.

Two days ago, they announced that they were signing an agreement with Praj Industries to provide renewable, low carbon, low particulate, sustainable aviation fuel and renewable premium gasoline in India.
That sounds like a big deal! But nothing happened.
They’re licensing the technology and Praj is going to produce it.

Looks like Praj is actually kind of a big deal.
They trade at around 70/share.
13 billion dollar market cap.
Heavy into the “bioeconomy” – which I love.
Let’s save the fuckin’ world!

Here’s that article.

Today, though, they announced that they have a 1.5 billion dollar contract with Trafigura Group, which is a trading group that trades commodities (like gasoline and other fuels).
The PR details Trafigura’s assets for some reason. They have a lot of money, apparently.
Trafigura is buying Gevo’s jet fuel.
It’s like a futures commodity contract.
Remember when oil dumped to negative amounts because buyers couldn’t receive oil because they had nowhere to put it, so they were paying people to take their contracts?
This is a take or pay contract that expires in 2023, which seems optimistic, given Gevo’s financial fundamentals.

WTF is a take or pay contract?
 

Investopedia:
Take or pay is a type of provision in a purchase contract that guarantees the seller a minimum portion of the agreed on payment if the buyer does not follow through with actually buying the full agreed amount of goods. Take or pay provisions can commonly be found in the energy sector, where overhead costs are high.

Basically, if Trafigura doesn’t buy the commodity that they’re entitled to by the contract, they still have to pay Gevo a percentage of that contract.

That was the catalyst.
$1.5 billion dollar futures contract.

Here’s a link to that article.

Let’s look at the CEO: Patrick Gruber!
ooooh.. Recognized as a leader and stuff.
Has a ton of awards.
Wrote a book on biorefineries.
God damn! Sells for $200 on Thriftbooks.com
Thrift indeed.

The guy doesn’t look like a complete skeezeball.
Look at a picture of the CEO of UAVS and I’m like:
“I would not trust that guy to take out my garbage.”
Mr. Gruber, on the other hand, triggers different concerns for me.
He looks like he’d murder you, but probably not for your money.
Maybe it’s the backdrop in the picture.

Biofuel is people.

Anyway!
Awww! There’s a much warmer picture of him on crunchbase.com.
Oh shit.
He owns A LOT of shares of $GEVO.

4 Years ago, there was a petition started on change.org demanding that Patrick Gruber step down as CEO of the company. The petition accuses him of defrauding shareholders by doing reverse splits and dilutions. Interesting.
Read about it here.

Okay, so clearly the stock is not up 200% because it’s great.

Here’s what I think happened:

Market conditions:
We recently hit all time highs in the market and there was a pull back- a pretty significant dip.
TOS traders have been battling their broker and platform all week, but reportedly those issues were fixed today.
Short sellers got cocky AF as the last three days have been bear heaven.
This 25 million dollar stock announced a 1.5 billion dollar deal
after announcing they had a deal with Praj to produce.
Buyers became interested in the stock, whether as speculative investors, daytraders, or chumps buying the hype.
Short seller became over-enthusiastic because they care about fundamentals (like plebes).
Investors, market makers, and shady dealers kept buying the price up in order to maintain investor interest through backroom deals that I have little to no insight in.
Buyers continued to shove the stock up and up until the short sellers couldn’t take it anymore.
Then, boom. Short squeeze.