Gevo Inc GEVO Stock News

Gevo Inc (NASDAQ: GEVO) is making a run for the top in the market this morning, trading on gains of more than 60%. The gains come after the company announced long-term contracts that exceed  $1.5 billion in revenue. Here’s what’s going on:

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GEVO Stock Rockets On $1.5 Billion In Contracts

In a press release issued early this morning, Gevo said that it has entered into a binding Renewable Hydrocarbons Purchase and Sale Agreement on August 17. The agreement was signed with a wholly-owned subsidiary of Trafigura Group, Trafigura Trading.

In the release, the company said that this is a long-term, take or pay contract and the largest contract in its history. At present, Trafigura is a leading independent commodity trading company with more than $171 billion in revenue.

The agreement states that Trafigura will take delivery of 25MPGY of renewable hydrocarbons. Most of this is expected to be in the form of low-carbon premium gasoline. The company will also take delivery of renewable jet fuel from GEVO.

In a statement, Patrick Gruber, CEO at GEVO, had the following to offer:

This is our largest single contract to date, and with it, brings Gevo to over $1.5B of revenue in long term contracts when added to the other contracts we have in place. As drop-in fuels, Gevo’s renewable, very high-octane gasoline and SAF are a perfect fit with Trafigura’s existing fuels business and will allow them to integrate these low-carbon options seamlessly into their supply chains. We expect that our low-carbon fuels will enable certain of Trafigura’s customers to substantially lower their carbon footprint.

The above statement was followed up by Robert Kreider, Head of Strategic Management and Development Group, North America for Trafigura. Here’s what he had to say:

Today’s agreement is a natural fit between our companies that will help drive the expansion of our renewable fuels product offering. We look forward to continuing to make a positive impact on the transition towards a low carbon economy.

This Is Huge News

Gevo is a very small company, currently trading with a market cap of around $50 million, and that’s after the tremendous growth seen today. Let’s not forget, the long term revenue from the agreement announced today is more than $1.5 billion. That’s massive, there’s no other way to put it.

Ultimately, with such strong revenues likely ahead, GEVO is a stock that’s well worth watching closely!

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