Tuesday, February 08, 2011

Biofuels Digest Prediction on Gevo IPO

Biofuels Digest notes on 8 Feb 2011:

Gevo IPO.
Based on our source checks, we expect Gevo’s IPO to price in the next 24 hours at $12-$13, raising $85-$90 million and pricing the company at around$325 million overall. Over the past few days, we have seen the same kinds of activity that we saw with Amyris in its last few hours before pricing. We may well see Gevo price tonight, after a whirlwind two-week road show. We hear, as with Amyris, low levels of interest, but we are expecting a handful of large institutionals to step up for the investment – some of them well remembering the Christmas bonuses they earned with a similar gut-check call with Amyris in September.

No mention of the patent infringement suit brought against Gevo by Butamax in the biobutanol area.

Reuters reported on the IPO on February 8:

Khosla Ventures-backed Gevo Inc priced shares in its initial public offering at the top of the expected range on Tuesday, an underwriter said.

The company sold 7.15 million shares for $15 each, raising $107.25 million. It had planned to sell shares for $13 to $15 each.

The company plans to make and sell isobutanol, which can be used in blended fuels as well as in the production of plastics, fibers and rubbers. The company, which has never posted a profit, plans to begin selling isobutanol commercially beginning in the first half of 2012.

Separately, Solazyme's US 7,883,882 issued on 8 Feb 2011. Solazyme had to narrow the base claim a bit because of an unfavorable Office Action in June 2010.

UPDATE on Feb. 12. From a post by MICHAEL KANELLOS titled Mixed Greens: Solazyme IPO Soon? Plus, An Answer to Congress on Carbon Taxes

So far, the biofuel IPOs have fared well. Codexis, which makes enzymes for biofuels, has sunk, but Amyris has seen its stock rise from $16 to $31. Like Gevo, Amyris gets most of its current revenue from buying and selling conventional ethanol, but the company has devised an industrial lubricant that is getting rave reviews. (And they can have this slogan -- Amyris Encounters -- for free.) Gevo went out at $15 and now sits at $16.50, a ten percent jump.

If Solazyme does go public, it will be the first oil producer to actually get most of its revenue from oil that comes from its intellectual property and processes. Believe me, in biofuels, that's rare. Here's an award-winning film (Telluride, 2009) on Solazyme.


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