BioFuel Energy Corp.(NASDAQ:BIOF) a lightly traded
company saw a sudden surge in price and volume, nearly after a week when hedge
fund manager David Einhorn disclose his increased stake in the small ethanol
company.
The Green
light Capital owned by David Einhorn bought 69,382 shares in the last 60 days,
raising its stake in BioFuel Energy to 36.2 percent.
With a capacity of about 110 million gallons per
year the Denver Company has ethanol-production facilities in Nebraska and
Minnesota. It has been hit this year by higher corn prices due to drought in
the Midwest. If commodity margins remained narrow for a long time, it could
face trouble generating enough cash to service debt and operate its plants the
Company warned.
Will
BIOF Continue To Move Higher? Find Out Here
The U.S. Energy Information Administration said that
the U.S. ethanol output slipped last week to 816,000 barrels per day. That was
down from 829,000 the week earlier, but remained well above the low of 796,000
seen in mid-July. The reduced profits for ethanol producers were because of the
Midwestern drought which has led to higher corn prices.
The stake has sent the stock up 200% in the past few
trading sessions. Shares then rolled, giving up about 12 percent through
Wednesday. On Thursday, the stock went up by $2.29, or 55 percent, to $6.44 in
afternoon trading. Volume was heavy — compared with a daily average of about
88,000 shares it had traded nearly 1.5 million shares with an hour left before
the closing bell.
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