Bleecker Street Research has revealed a short position in alternative biofuel producer Gevo (GEVO), citing concerns regarding Donald Trump. Now that Trump has been elected U.S. President, the short- selling firm is concerned about Gevo’s growth prospects. In a short report published today, Bleecker Street Research raised several concerns about GEVO stock, including that Trump’s election could compromise a conditional loan that Gevo has received from the U.S. Department of Energy (DOE).
What’s Going On with Gevo Stock Today?
So far, news of the short report hasn’t impacted Gevo stock. As of this writing, GEVO is up 9% for the day and isn’t showing signs of slowing down. While shares fell sharply last week, the stock has performed extremely well over the past two quarters and is currently up 255% for the three-month period.
Investors shouldn’t interpret this performance as the short report being inconsequential, though. It raises doubts about Gevo’s most recent growth catalyst, a $1.46 billion conditional commitment from the DOE. On October 16, 2024, Gevo announced that this new loan would be used to build its sustainable aviation fuel plant in Lake Preston, South Dakota.
While this news initially boosted GEVO stock, Bleecker Street Research sees potential problems with it. In the short report, it alleges that Gevo’s management has misrepresented the likelihood of the conditional loan actually being granted. On top of that, the short seller believes that under Trump, the DOE is substantially less likely to approve the loan, which could severely compromise GEVO stock. This concern is well-founded, as Republican administrations don’t tend to prioritize funding clean energy.
Wall Street Is Fairly Bullish on GEVO Stock
Few Wall Street analysts follow Gevo due to its penny stock status. But those who do have a Moderate Buy consensus rating on GEVO stock based on one Buy and one Hold assigned in the past three months, as indicated by the graphic below. After a 75% rally in its share price over the past year, the average GEVO price target of $8.63 per share implies 353% upside potential.
