Adam Gefvert, CFA
Long/short equity, short only, growth, special situations

Gevo, An Extremely Overvalued Ethanol Plant, Has Failed With Its Isobutanol Project

The ethanol producer, Gevo (NASDAQ:GEVO), has failed in its attempts to create isobutanol. Therefore, all it is now is a small ethanol plant, which puts its intrinsic value at $13.2M, or about $0.20 per share. Later in the article, I explain how I got to this valuation.

Gevo's Beginnings

When Gevo first became public, management said they're going to make a useful liquid called isobutanol, which can be produced using an existing ethanol plant infrastructure. At the time, back in 2011, ethanol prices and margins weren't very good so there were a lot of stranded ethanol plants. Gevo's idea was to help the ethanol plant owners to retrofit the plants with the isobutanol technology and create isobutanol. So...

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