Just one day after Bleecker Street Research published a short report on alternative biofuel company Gevo (GEVO), another short-selling firm revealed a position. Iceberg Research did not publish a formal report, but it did compile a long social media thread discussing why it is shorting GEVO stock, citing concerns regarding both Donald Trump’s incoming presidency but also highlighting the threat of rising competition.
What’s Going On with Gevo Stock?
Unlike yesterday, news of this short report is pushing Gevo stock down today. As of this writing, the company is down 15% for the day and is poised to close out the trading week deep in the red after declining 27% over the past five days. GEVO stock has risen significantly over a three-month period, but it still trades at penny stock levels, currently at $1.62 per share.
Like Bleecker Street, Iceberg Research discussed the potential threat to Gevo’s growth prospects that a Trump presidency poses. Specifically, the company is dependent on a conditional loan from the Department of Energy, which may not be granted once Trump assumes the presidency. But it also highlights challenges that the company may face as it attempts to produce sustainable fuel for the aviation industry, specifically with its alcohol-to-jet (ATJ) process.
“We believe the shifting political landscape and the challenging economics of ATJ make Gevo’s renewable project highly speculative and prone to failure,” the short seller summarizes.
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 50% rally in its share price over the past year, the average GEVO price target of $8.63 per share implies 441% upside potential.
