Gevo (GEVO) Stock Doubles on Partnership with Alaska Airlines for Renewable Alcohol-Based Jet Fuel

Shares of Gevo Inc. (GEVO) were trading up +1.55 or +28.39 percent to $7.01 per share in Friday's premarket after announcing yesterday that the company had signed an agreement with Alaska Air (ALK) for the airline to purchase Gevo's renewable alcohol based jet fuel, and to fly the first commercial flight on the company's new alcohol to jet fuel or ATJ.

Gevo Inc. stock more than doubled in yesterday's regular trading session, closing up +3.01 or +122.86 at $5.46 per share.

Englewood, Colorado based Gevo Inc. is a next generation biofuels company focusing on renewable technology and the production of chemical products. The company's proprietary technology uses a combination of chemical engineering, synthetic biology and metabolic engineering for the production of isobutanol, ethanol and other products derived from renewable feedstocks. The company operates a biorefinery in Silsbee, Texas in a partnership with South Hampton Resources, with production of isobutanol and ethanol at the company's fermentation plant in Lucerne, Minnesota. Gevo's other partners include the Coca Cola Company (KO), Total SA and Toray Industries Inc.

SeaTac, Washington based Alaska Airlines is owned by the Alaska Air Group and is the seventh largest domestic carrier. The company operates in over 100 cities with its network encompassing the United States, Canada and Mexico. Alaska Airlines was the first U.S. airline to make commercial flights using biofuels derived from used cooking oil.

Joe Sprague, senior vice president of external relations at Alaska Airlines noted that, "Developing a domestic, competitively priced, sustainable supply of biofuels is fundamental to the future of American aviation. The cost of fossil-based jet fuel is one of the largest expenses for airlines. This investment in Gevo's ATJ will help reduce our exposure to high fuel prices, minimize our carbon footprint and demonstrate growing demand for fuel alternatives.

In addition to the agreement for purchasing fuel, Alaska Airlines will make a demonstration flight using Gevo's new biofuels after the company receives ASTM International certification, which is projected to occur before the end of this year. The company has been working on the ASTM certification for six years, with extensive testing of engines and data analysis by all of the major equipment manufacturers. After the fuel is approved, it can be integrated seamlessly to the fuel distribution infrastructure and ultimately into commercial airliners.

Dr. Patrick Gruber, Chief Executive Officer for Gevo said that, "A sustainable biofuels industry would help insulate airlines from fuel price spikes, enabling them to offer economical air travel while remaining profitable, while helping meet their environmental goals, and spur economic growth within and outside of aviation. We greatly appreciate Alaska Airlines as a commercial partner as we move towards commercialization.

Gevo Inc. stock has been under significant pressure for the last two years, falling from over $30 per share in August of 2013 to a low price of $1.32 made this year. The company is showing negative earnings per share this year of -$8.26. Nevertheless, with the Alaska Airlines deal and other airlines possibly interested in the company's bio-jet fuel, the stock may be ready to make a significant recovery.

Other News About GEVO

Gevo to Host Conference Call to Report First Quarter Financial Results on May 12, 2015

Company will release its results for the first quarter next week.

Gevo Signs Strategic Alliance Memorandum of Understanding With Praj

Praj Industries will license Gevo's isobutanol technology for sugar based ethanol plants.

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Published on May 8, 2015
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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