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Pacific Ethanol, Inc. (PEIX) Shares Balloon More Than 15 Percent Tuesday Only to Deflate During After-Hours Trading

Buoyed by a strong market and bargain-hunting investors, shares of Pacific Ethanol, Inc. (PEIX) soared more than 15 percent, or 66 cents, to reach $4.95. The Sacramento, Calif.-based renewable fuel producer reversed its troubling downward trend that saw share prices plummet 70 percent in just a year.

After-hours trading was not as kind, sending shares spiraling nearly 7 percent to $4.61 after the company filed a Form 8-K with the Securities and Exchange Commission stating that it is anticipating a $14 million loss for the 2007 fiscal year. Pacific Ethanol has limited liquidity and requires additional financing to cover operations, according to the filing.

“If the company is unable to obtain substantial additional financing, it will be unable to achieve its business objectives, will be forced to delay or abandon the construction of one or more plants and may be forced to delay or abandon its plant expansion program in its entirety,” Pacific Ethanol said in the filing.

The rest of the week could continue to be mixed for Pacific Ethanol as corn futures have already hit $5.4725 on the Chicago Board of Trade, up 8 cents on Tuesday alone, but investors continue to seek the lower-priced ethanol stocks, while spring and summer travel is expected to boost demand for ethanol.

Pacific Ethanol, which was founded in 2003, says its destination model and state-of-the-art production practices allows it to produce ethanol that reduces carbon dioxide emissions by 40 percent compared to conventional gasoline. The company is in the process of constructing over 420 million gallons of capacity by 2010 in strategic locations across the western United States.

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