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Gevo Inc. (GEVO), a U.S. biofuel producer backed by French oil company Total SA (FP) and specialty-chemicals maker Lanxess AG (LXS), declined as investors took advantage of speculation the company will resume isobutanol production.
Gevo fell 2.1 percent to $2.33 at the close in New York. Volume was more than seven times the three-month daily average.
Investors are selling today after the Englewood, Colorado- based company jumped 17 percent yesterday, Shawn Severson, a San Francisco-based analyst at JMP Securities LLC, said in a telephone interview.
“It’s profit taking,” said Severson, who rates Gevo the equivalent of buy with a 12-month price target of $6. “If you bought it a couple weeks ago at $1.80 or $1.90, you might be trading around today.”
The gain may be linked to speculation Gevo is preparing to switch back to isobutanol from ethanol at its plant in Luverne, Minnesota, he said.
The company has lost 34 percent of its market value since announcing Sept. 24 that it stopped processing corn into isobutanol, a biofuel that may be blended with gasoline or refined into jet fuel and specialty chemicals, to adjust its manufacturing process.
“The company never gave a time for an expected startup” of isobutanol, Severson said. “My initial thought is that it will be within the first half.”
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