Gevo Inc GEVO Stock News

Gevo Inc (NASDAQ: GEVO) has had a rough start to the short week this week. Yesterday, the stock gave up 10%. Today, it’s down 8% in the premarket. Of course, this movement is concerning many. Nonetheless, I see the declines as an opportunity. Here’s what’s going on:

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Why GEVO Is Falling

Yesterday, Gevo issued a business update, outlining a bunch of positive news. Unfortunately, there was also news with regard to coming dillution released. Gevo reminded investors that it recently raised a net of $46 million in an offering. The company also raised $16 million from the exercise of warrants.

This funding wasn’t enough.

In the release, GEVO said that it continues to pursue a targeted capital raise of about $200 million. For a company with a $78 million market cap and assets that were appraised at $400 million, that’s going to take quite a bit more dillution. So, the market is pricing in that dillution.

However, once the market prices all of this dillution in, the declines are likely to present a compelling opportunity.

There’s A Good Reason For All The Fund Raising

Gevo’s clean, renewable fuels are the best in the business, and the company intends on staying on the top. To do so, it is blitzing the market, pushing out product as fast as it can to build consumer recognition of its brand.

In fact, the company recently signed agreements that will generate more than $1.5 billion in revenue over their terms. So, the demand is clearly there, but Gevo has to meet that demand.

In order to do so, the company is working to construct three new production facilities. Moreover, GEVO is working to expand production within its current production facilities. Essentially, GEVO is in the energy industry, what Amazon.com was years ago.

The company isn’t generating a profit, but it’s spending massive amounts of money on infrastructure. That plan seemed to pay off for Amazon.com, which is now the eCommerce leader and one of the largest companies in the world.

While Amazon.com jumped on the eCommerce trend, and pioneered the way to the eCommerce driven reality of retail we know today, Gevo is doing the same thing in the fuels industry.

With consumers, companies, and governments focusing the reduction of carbon footprint, there has never been a better time in history to blitz the market with clean fuels. As they become the norm, GEVO could see Amazon.com-like long-run growth. That’s hard to ignore my friends.

As such, GEVO stock is one to heavilly consider.

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