The reaction may be a bit premature as this was just a shelf registration statement. It is worth noting that no underwriters were named in the offering.
After looking at the “use of proceeds” we also noticed a broad discretion of funds and that may be weighing on shareholders. The company noted the “for general corporate purposes” and that includes working capital requirements, capital expenditures, acquisitions, acquisitions of additional ownership interests in New PE Holdco, and the repayment of outstanding debt.
Shares are down over $0.10 or about 10.6% at $0.885 this morning and the 52-week trading range is $0.25 to $3.78. Raising the full $100 million might be a bit difficult in the current climate because the stock’s market capitalization rate today is down to about $78 million according to the Yahoo! Finance data.
As most ethanol producers have discovered, nothing comes for free these days. At least not for long.
JON C. OGG
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