Inflation And Soaring Commodity Prices Make Corn Ethanol Unprofitable; Blue Biofuels Offers An Alternative
Summary
- In case you haven't noticed, the bond market is signaling that inflationary pressures are returning to the U.S. economy.
- We are already seeing prices rise in both energy and food, two critical components of the core Consumer Price Index, or CPI.
- The "Food vs. Fuel" debate has long pitted two sides of an argument against each other which now may become more relevant than ever.
- Ethanol producers, who use corn as feedstock, may be facing unmitigated problems as the economics of rising corn prices make it more difficult to achieve profitability, and question the long-term viability of the industry.
- Blue Biofuels has developed a simple and unique proprietary technology that uses feedstock from inexpensive cellulosic material as a very attractive economic alternative to producing ethanol.
The investment thesis for our #1 micro-cap stock pick for 2021 just got a whole lot more compelling in recent weeks. A catalyst has suddenly developed that may serve to greatly enhance the investment merits of this turnaround story that so far has escaped the attention of Wall Street, and for the most part continues to remain undiscovered by investors.
Source: Blue Biofuels
We continue to remain very bullish on Blue Biofuels (ALLM), as we believe that the company could be well-positioned to benefit from some of the more recent headwinds that have begun to appear on the horizon, which could negatively impact traditional corn ethanol producers.
Over the past few weeks, the U.S. bond market has been telegraphing continuing concerns among investors about the likelihood of inflation returning with a vengeance.
As a result, the decline which has taken place in bond prices has created a de-facto rise in interest rates, superseding any monetary policy intervention by the Federal Reserve.
In other words, the fixed-income market is essentially circumventing FOMC action, and taking rates higher in spite of the passive stance adopted, thus far, by the U.S. Central Bank.
The severity of the current decline in bond prices has only been rivaled by the decline seen back in 2013, during the now famous taper-tantrum, when the Federal Reserve hinted at slowing the pace of its Quantitative Easing program.
Source: BofA Global Investment Strategy, Bloomberg
This returning specter of inflation has been felt across a number of different areas of the U.S. economy, as well as various assets classes, but perhaps none as critical and important as food and energy costs.
The Consumer Price Index, or CPI, consists of a basket of goods and services designed to track inflationary pressures for those items that are most used in the everyday life of consumers.
The most recent numbers, released on February 10, 2021, showed some interesting changes in areas that for a long time had shown very modest increases.
Source: Bureau of Labor Statistics
Here is an excerpt, pertaining to food prices, from the latest report:
The food at home index increased 3.7 percent over the past 12 months. All six major grocery store food group indexes increased over the period, with increases ranging from 2.5 percent (cereals and bakery products) to 5.1 percent (meats, poultry, fish, and eggs). The index for food away from home rose 3.9 percent over the last year. The index for limited service meals rose 6.2 percent, the largest 12-month increase in the history of the index, which began in 1997. The index for full service meals rose 2.9 percent over the last 12 months.
Source: BLS.gov
The latest report also referenced energy prices:
The energy index continued to rise in January, increasing 3.5 percent. The gasoline index was again the dominant factor in the increase, rising 7.4 percent over the month. (Before seasonal adjustment, gasoline prices rose 6.9 percent in January.) The fuel oil index also rose in January, increasing 5.4 percent. However, other energy component indexes declined; the index for electricity fell 0.2 percent over the month, and the index for natural gas fell 0.4 percent.
Source: BLS.gov
What we found especially noteworthy is that the energy index, registering a monthly rise of 3.5%, is a huge increase considering that over the previous 12-month period the energy index fell by a rate of 3.6 percent, the gasoline index fell by some 8.6 percent, and the fuel oil index fell by a double-digit 16.5 percent.
Because food and energy prices tend to be more volatile than most of the other components of the CPI, the Bureau of Labor Statistics also tracks the index with both the food and energy data omitted; referred to as less, or "ex", food and energy.
On a year-over-year basis, the CPI ex-food and energy rose for the month of January 2021 at a rate of 1.4% on an unadjusted basis.
The Consumer Price Index for February 2021 is scheduled to be released on Wednesday, March 10, 2021 at 8:30 a.m. Eastern Time, and we expect to see continued increases in overall consumer prices, especially in the all-important food and energy sectors.
For those who have doubts about the return of inflation, and the start of another commodity super-cycle, just take a look at the Commodity Research Bureau's data on commodity prices over the past five years.
Source: Trading Economics
As we indicated, food and fuel are among the most volatile sectors in the economy. This becomes especially important for Ethanol producers, since dramatic swings in commodity prices can have a direct effect on their business model and profit outlook.
There are a number of ethanol producers, and alternative energy companies, that could see a significant negative impact to their business, as a result of inflationary pressures on the price of using corn as feedstock.
The ethanol industry continues to struggle to reach profitability, on any kind of consistent basis, and the problem that high corn prices have already had in past commodity cycles appears to be on the verge of once again rearing its ugly head.
As a whole, in 2019, ethanol producers had a very difficult year reaching profitability. A report by Scott Irwin of the Department of Agricultural and at the University of Illinois dated January 29, 2020, show just how bad it was.
Companies such as Aemetis, Inc. (AMTX), Gevo, Inc. (GEVO), Green Plains, Inc. (GPRE), Green Plains Partners LP, (GPP), Alto Ingredients (formerly Pacific Ethanol) (ALTO), Renewable Energy Group, Inc. (REGI), REX American Resources Corp. (REX) could all face significant headwinds, in 2021 and beyond, if we are entering into another great commodity price supercycle.
In addition, in an environment where prices for corn, wheat, and soybeans are escalating, not only does this impact the grain markets themselves, but since much of the protein in the U.S. food chain comes from animals whose primary source of nourishment come from these same grain commodities, these increased costs for raising animals put pressure on prices for beef, pork and chicken products.
Most cereals and other processed foods also contain large amounts of these same grains, and manufacturers must weigh the impact of these increased prices on the margins pertaining to the products that the sell.
This is where the whole "Food versus Fuel" debate focuses on the use of corn for ethanol production, as opposed to its use in the food supply chain. Many believe that it is a question of priorities, and it has sparked intense feelings on both sides of this issue.
The COVID-19 pandemic has illustrated the problem of feeding the U.S. population. We would have found it hard to imagine, just a few short years ago, that there would be so many people in the greatest economic power in the world who would be suffering from a shortage of basic food supplies.
Does this combined problem of food price inflation and food supply shortages bring another perspective and an additional element to consider in the FVF debate?
Perhaps it will become a moot point, if corn prices reach a level where ethanol production becomes economically unsustainable due to the high cost of using corn as feedstock.
There are just over 200 ethanol plants in the United States, and all but three of them use corn as their primary feedstock in ethanol production. Many of these plants have had to reduce their levels of production for a variety of reasons.
Suffice to say that if food inflation returns, and corn prices begin to rise over time, many marginal producers will be forced to shutter their plants, and even some of the biggest and most well capitalized names in the industry may face a similar fate.
Across the U.S., there are 202 ethanol plants that have 17.1 billion gallons of total capacity, according to RFA. In a typical year, eight to 10 of those may go offline. Since March 1, 2020, 69 plants, with an annual production capacity of nearly 6 billion gallons, had been fully idled. Another 64 facilities have reduced output anywhere from 10% to 50%, which took another 1.7 billion gallons out of the supply. “I’ve been involved in the ethanol industry for about 15 years, and I've never seen anything close to this,” says Geoff Cooper, CEO of RFA. “It's really a devastating time for the industry.” In a normal year – when every plant is running at normal rates – these facilities make about 44 million tons of distillers’ grains annually. With nearly 66% of production either idled or reduced, that adds up to a significant amount of feed lost.
Source: Agriculture.com
This chart that highlighted the swings in corn prices. At higher price levels the cost of using corn as a feedstock can negatively impact an ethanol producer's ability to operate a plant at attractive economic levels.
Source: Macrotrends
After a steady decline in the price of ethanol, from 2005-2020, prices appear to have bottomed and are now beginning to move higher.
Source: Trading Economics
While the increase in the price per gallon of ethanol is good news for many producers, it appears that it is being offset by an increase in the price of corn used as feedstock.
The bottom line is that as long as ethanol producers are dependent on a highly-volatile commodity such as corn for feedstock, the long-term picture will remain unpredictable and uncertain at best, and could become economically unsustainable and financially unviable in a worst-case scenario.
Investors in the financial markets hate uncertainty, but what we have seen recently in the price of companies like Gevo, Inc. (GEVO) and a few others seems to indicate that there is either a total lack of understanding of the dynamics currently at play in the ethanol market, or a complete disregard for the accompanying risks of the coming inflationary headwinds that corn-based ethanol producers will face in the near future and possibly beyond.
We just don't see how investors can justify the euphoric valuations, that have suddenly appeared, in some of the green energy companies that have risen to the forefront of return expectations for the next 3-5 years.
Many of these companies have recently retraced some of the massive short-term gains that they have enjoyed since the Biden victory in November, but we still view them as having a risk profile not commensurate with the potential rewards from their current stock price levels.
Investors in many of these alternative energy stocks seem to have convinced themselves that they have discovered the next big road-to-riches story.
One company that remains virtually undiscovered by many investors is Blue Biofuels, formerly known as Alliance Bioenergy Plus.
If you haven't read our previous articles and blog page on Seeking Alpha, we encourage you to do so.
Perhaps, what is most intriguing about this micro-cap company is that, while it is focused on producing sugars for ethanol, along with capturing a segment of the enormous bio-plastics market, its has two primary and distinct advantages over traditional industry players.
First, unlike most other ethanol producers, Blue Biofuels is not subject to the highly-volatile nature of corn prices, since its proprietary CTS 2.0 technology, uses low-cost cellulosic materials. This puts the company at a distinct cost advantage over the competition.
Second, cellulosic biofuels qualify for the EPA's D3 RIN credit, while the RIN credit for corn-based biofuels falls into the D6 category.
Currently, the D3 cellulosic RIN credit is almost four times the corn-based D6 RIN credit.
Below is a chart from the EPA web site outlining the weekly trends of all RIN prices from 2010 through the most recent report dated February 10, 2021.
Source: EPA.gov
The RIN credit is basically a government subsidy to encourage ethanol production, to meet the annual mandate set by the Environmental Protection Agency, and are in addition to any prices that an ethanol producer receives on the sale of their products.
Since there is basically no cost to an ethanol producer, to receive the RIN credit, it represents additional revenue at a 100% margin.
As a ethanol producer, would you rather have an extra $2.00 of revenue on top of your revenue from the sale of ethanol, or would you prefer to receive an extra $0.50 for every gallon of ethanol that you sell?
Just last week, RIN credits hit an all-time high.
Since most of the ethanol plants in the U.S. use corn as feedstock, they are not only paying a much higher cost for that raw feedstock, transportation and storage of it, but they are only getting about one-fourth of the extra revenue derived from the receipt of the EPA RIN credits.
The math and economics simply favor a cellulosic ethanol producer over a corn-based ethanol producer.
So the question is why aren't more ethanol producers using cellulosic material to produce the sugars essential to ethanol production?
The answer is because they have yet to find a way to process cellulosic material without the use of expensive and caustic enzymes and/or high energy heat processing methods to extract the sugars and lignin from the cellulosic feedstock.
Blue Biofuels CTS 2.0 (Cellulose-To-Sugar) technology uses a mechanical process, along with the use of an organic catalyst, to extract the sugars and lignin by-product from cellulosic feedstock.
This is not to say that there are not meaningful and substantial risks to investing in Blue Biofuels.
We have said many times, and throughout many articles that we have written over the years on Seeking Alpha, that micro-cap stocks are extremely risky.
None more so, than in the case of Blue Biofuels, since they are a late-stage development company, with no products, no customers and no revenues.
While we believe that they will ultimately succeed, we pull no punches in warning investors about the potential risks of taking an equity position in the company, through common stock ownership.
Micro-cap stocks carry additional risks beyond those of higher classes of securities including, but not limited to trading outside of a listed exchange, potential liquidity issues, dealing with penny-stock rules, lack of margin eligibility, a possible absence of transparency regarding BBBO quotes, a limited number of Market Makers willing to provide depth to the order book, potential issues regarding financing activities, inadequate capital to execute on the company’s business plan, going concern caveats, and the potential inability to compete with larger companies due to limited financial and personnel resources. Please invest responsibly. We encourage individuals to only invest what they can afford to lose, up to a maximum of 100% of their investment.
Ultimately, whether or not Blue Biofuels will succeed depends on the two primary risks that we see associated with an investment in this company:
1. The ability to bring the current prototype development, now in the fourth generation, to scale for commercial application, and
2. Whether the company will be able to raise the substantial amount of capital that will be needed to advance their disruptive technology forward.
Cellulosic feedstock comes in many varieties. Some of the primary sources include plants such as grasses, bushes, mulch, palm fronds, paper, cardboard, stems, stalks, and leaves of plants as well as trunks of trees, vegetables such as broccoli, cabbage, lettuce, pineapple crowns, barley straw, oat straw, rice straw, wheat straw, sugarcane, cotton seed hulls, flax, different kinds of fruits, etc.
The cellulose content in vegetables ranges from 1 to 21%; fruits range from 0.6 to 4.2%; seeds range from about 2 to 12%; agricultural residues range from 31 to 59%; wood ranges from 41 to 53%; flax and hemp have about 70% cellulose; and cotton (the purest natural cellulose) has about 95% cellulose. The free sugars shown in Table 4 are the sum of glucose, fructose, and sucrose. The ‘crude fiber’ is reported as the sum of cellulose and lignin in the case of the seeds. The indigestible portion of some fruits, called ‘dietary fiber,’ is reported as the sum of cellulose, lignin and hemicellulose.
Source: Science Direct
In Florida, there are literally thousands of acres of former citrus groves that sit idle, and are not yielding any crops. Many former fruit-producing farms have gone out of business and this former fertile land can be purchased at very reasonable prices, or leased for even less.
One of the highest yielding and lowest cost sources of cellulosic material is something called "King Grass". In the temperate climate of Florida, King Grass along with other plants flourish. King Grass needs very little care, very modest irrigation, and can be planted and harvested, then replanted, multiple times throughout the year.
On September 1, 2020, it was announced that ALLM had begun a pilot test program, using 18 acres of land in Florida, to test and optimize the planting and harvesting of Giant King Grass which will be used as feedstock to produce sugars for fermentation into ethanol.
There have already been multiple studies conducted on King Grass in Vietnam. Some of the key features of King Grass include:
Renewable energy crops and local production. The productivity can reach 167 tons / acre (375 tons / ha). Good thermal value (> 3800 Kcals / kg at 26% humidity) and little ash content (<9%). Can grow in harsh areas, less water and tropical climate, even where agricultural crops such as maize, rice can not grow. In particular, can continue to grow in the next 6 to 7 years after planting and the harvest made every 3 months. This is a big plus compared to other conventional fuels. Can be harvested to produce pellets or biofuel when it is 13-16 feet tall, or every 150-180 days.
Source: One Value (may require Google Translate to view in English)
Comparing King Grass to corn, shows the many advantages that King Grass has over corn for use as feedstock ethanol production.
1. Growing corn is labor intensive, requiring special machinery for both planting and harvesting. Giant King Grass is easy to plant and even easier to harvest.
2. Corn crops must be treated against insect infestation, through the spraying of costly pesticides by crop dusting, or other mechanical methods. Giant King Grass needs no pesticides since there are few, if any, problems posed by insect infestation.
3. Corn crops need to receive water to grow properly, either through natural weather patterns that produce moisture, or through costly irrigation systems. King Grass requires much less moisture and water to flourish.
4. Corn can only be planted and harvested once a year. Giant King Grass crops can be planted and harvested multiple times annually.
5. Corn requires a minimum of 6 hours of sunlight per day during its lifecycle to produce healthy, vibrant kernels. Giant King Grass also needs plenty of sunlight, but can still be used as feedstock, even if not fully developed.
6. Storage and transportation costs can be high and require special warehouses, barns, or silo facilities to keep the corn from developing mold spores, damage arising from floods, adverse temperature conditions, and destruction due to birds and other animals searching for food. No such requirements are typically needed for Giant King Grass
7. The corn kernels must be separated from the stover (husks and cobs) in order to facilitate processing into sugars before fermentation into ethanol. Giant King Grass can be used in its entirety with no special separation of the plants needed and generally nothing wasted.
8. Giant King Grass can also be converted into pellets, which are much easier to feed into the CTS 2.0 reactor, due to their compact size, then large stalks of dried King Grass.
In the pellet conversion process, the grass is dried, pressed into pellets, and then can be shipped in bulk similar to other grains. This becomes especially important when there is a need to transport King Grass feedstock to ethanol plants operating in other states or countries.
9. The corn field soil must be tilled before planting begins for the next season. Sometimes the depletion of nitrogen and other natural nutrients in the soil requires further treatment of the ground soil. Giant King Grass does not require typically these additional steps and replenishment of soil nutrients.
10. A typical acre of corn will produce roughly 600 gallons of ethanol per one acre, per year, versus 3,000 gallons of ethanol that can be produced annually from one acre of King Grass.
The yield of giant king grass in tropical area with a 12-month growing season is 167 tons per acre (375 metric tons per hectare) which is much higher than other grass. As a kind of energy crop, its energy content is also excellent at 1900BTU per bone dry pound (4400 kcal per kilogram or 18.4 MJ per kilogram). An analysis shows that properties of giant king grass are very close to corn straw.
Giant king grass pellet making process includes several steps: drying, crushing, pelletizing, cooling and package. The core step of whole line is pelletizing which is to press the raw material into pellets by a pellet mill. To produce high quality pellet, it is very important to choose the right and reliable pellet mill for your plant. As the moisture content of fresh giant king grass is about 70%-75%, so that it must be dried under sun or dry machine to 10%. Besides, the giant king grass is usually 4 meters tall, thus the crush process cannot be avoided.
Source: Biopelletrmachine.com
The yield of giant king grass in tropical area with a 12 month growing season is 167 tons per acre. Corn, on the other hand yields approximately 130 bushels per acre. One bushel of corn is equal to 56 pounds.
Doing the math, we see that one acre of corn will produce approximately 3.64 tons per acre, (130 bushels per acre x 56 pounds per bushel = 7,280 pounds or 3.64 tons per acre), while Giant King Grass can yield 167 tons per acre or roughly 46 times more than a typical corn crop per acre.
When it comes to biofuels, one ton of GKG can yield as much fuel as one ton of corn stover, according to a 2011 independent study. With these numbers, Viaspace chief executive Carl Kukkonen believes Giant King Grass is a worthy competitor in the bioenergy market.
'An acre of Giant King Grass yields up to 10 times greater tonnage than an acre of corn stover… With our high yield, we believe that Giant King Grass can reduce biofuel feedstock costs by up to 40 percent, even when compared to projected prices for corn straw as agricultural waste,' he said in a statement. 'As a result, Giant King Grass promises the cost-of-production breakthrough that has plagued the second-generation biofuels industry.'
GKG can be grown on marginal lands unsuitable for food crops, and is quite hearty – it thrives on warmth and sunshine, which makes the Imperial Valley an idea growing site. Giant king grass can be harvested for pellet or biofuel production when it is 13-16 feet tall, or every 150-180 days. In a tropical area with a 12-month growing season, it can produce a year-round supply at 167 tons per acre at 70-75 percent moisture, according to the Viaspace website.
Source: Renewable Energy World
What’s more, giant king grass can be grown on marginal lands unsuitable for food crops which improves the land utilization.
We would also note that simply comparing the costs between GKG and corn reveals a substantial difference in the cost of raw material in the two feedstock's. This gives GKG a distinct cost advantage over corn. The cost for Giant King Grass is approximately $45.00 per dry ton, versus corn at a price somewhere between $150.00 and $200.00 per dry ton.
Yes, our feed stock, which is as I mentioned it's either a grown grass or it's someone else's waste. The cost of that is you know ranging from zero, if it's somebody else's waste, to you know about $45 a ton if let's say you're growing some giant king grass or something like that. On the other hand, corn which is the main feedstock of ethanol produced in the United States, ranges in the let's say $150 to $200 a dry ton range. So our feed stock cost is significantly less expenses to begin with. Our capital cost will be a little higher because corn, you can bite into it you can practically taste the sugar. Obviously you bite into a piece of wood and it's not like that, so it takes a little bit more, but our process is uncomplicated. Unlike others we don't use expensive enzymes. It's a very simple cost effective catalyst, and so we believe that ultimately we'll be able to produce sugar, and then hence ethanol at a lower cost and from corn.
Source: You Tube (Interview with Dr. Anthony Santelli, CFO 9/09/2020 timestamp at 6:29)
In summary, we believe that the bond market has begun to force interest rates higher due to a perception, by investors, that we are possibly entering into a period of continued economic growth; the results of which will lead to rekindled inflationary pressures.
As we have already shown, from the chart illustrating the increase in the price of the CRB Index, commodity prices are showing significant increases, leading some economists to believe that we may be entering another commodity super-cycle.
Source: Zero Hedge
If that is the case, ethanol producers that use corn as feedstock, to produce sugars for conversion into ethanol, will face mounting pressures on their business model, through reduced margins from both rising corn prices and potentially lower ethanol prices.
Blue Biofuels has cracked the cellulosic ethanol code, in a manner of speaking, by the development of their proprietary CTS 2.0 conversion process, which not only produces sugar from plant-based materials for ethanol, but also creates a by-product called lignin, which can be used in the production of biodegradable plastics.
In addition to those two primary sources of revenue for the company, they also qualify for the Environmental Protection Agency's D6 RIN credit, which is roughly four times the amount of the D3 RIN credit which corm-based ethanol producers receive from the EPA.
We have shown the inherent advantages of Giant King Grass over traditional corn-based methods of producing sugars for ethanol, which include a lower cost and higher net yield per acre than traditional corn feedstock.
Giant King Grass is easier to plant, grow and harvest than corn. It requires less water irrigation, less sunshine and no expensive pesticides. All of this translates into lower labor and maintenance costs for GKG over corn.
It is inexpensive to transport and store, and when compared to corn from an efficiency of use comparison, only the kernels from corn are used in the traditional corn ethanol conversion process, while the corn stover (stalks and cobs) are not. In the conversion of Giant King Grass to sugars for ethanol, the plants are used in their entirety. Nothing is wasted.
Furthermore, since there are no expensive enzymes, caustic acids or high-temperatures used in the Blue Biofuels CTS 2.0 process, the reactor is able to use less energy and requires less time to convert GKG feedstock into sugars, over other competitive methods of cellulosic ethanol production.
Investors in the seven other companies, which we previously highlighted, (AMTX), (GEVO), (GPRE), (GPP), (ALTO), (REGI), (REX), operating in the renewable, green-energy sector, including existing ethanol producers, should pay close attention for any signs of margin pressures, and the impact of higher feedstock costs on the future profitability of these companies.
If these pressures were to continue, for any prolonged period of time, it could lead to more problems for the sustainability and future viability of the corn ethanol and biofuel industry.
While the worries of cheap oil and low-cost refined gasoline have abated, at least temporarily, resulting in a short-term boost to the price for a gallon of ethanol, there may be much stronger headwinds ahead.
The next challenge, facing the ethanol industry, may center around the high cost of agricultural commodities and the growing need to allocate the use precious farm acreage to provide food for human consumption and keep the cost of feeding farm animals, a key part of the U.S. food chain, from leading to even higher food prices, and inflation, in the future.
All of these issues, could create a confluence of factors, eventually leading to the perfect storm for micro-cap company Blue Biofuels.
Their technology could possibly usher in a new era of change in the way that ethanol is produced, in the way we allocate farmland resources, and in the way in which we protect and conserve the environment.
This article was written by
Analyst’s Disclosure: I am/we are long ALLM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Disclaimer: We are not responsible for updating this article, or our opinion on any of the stock(s) that are mentioned in our articles. We are not in the business of giving investment advice and ask that readers refrain from asking us for it. Please do your own due diligence before investing. We are not responsible for any actions that you take based on the opinions that we express on Seeking Alpha.
Please remember that this article is a reflection of our current opinion on ALLM. It is based on information that is publicly available at the time we wrote the article. Additional public information may be available but was not brought to our attention at the time we authored the article. We provide sources and links to factual information that we include in our articles but take no responsibility for the accuracy of their content. An investor should consider that new information may become available regarding the company's business activities, financial condition or corporate governance. It is the responsibility of each investor to make sure that they stay abreast of any new developments which may arise, that could have an impact (negative or positive) on their investment.
Blue Biofuels is a developmental-stage company, and currently has no finished products and no revenues. As a result, the company will need to raise additional capital to continue operations. There can be no assurance that they will be successful in obtaining additional financing in the future The company's auditors have questioned whether the company can remain a going concern. Investors should take this into consideration when deciding to invest in the equity securities of ALLM. There always remains the possibility that an investor in ALLM could lose 100% of their investment.
We currently own an investment stake of greater than 5% of the outstanding common stock of Blue Biofuels, a/k/a Alliance Bioenergy Plus, Inc.; ticker symbol: ALLM.
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Micro-cap stocks carry additional risks beyond those of higher classes of securities including, but not limited to trading outside of a listed exchange, potential liquidity issues, dealing with penny-stock rules, lack of margin eligibility, a possible absence of transparency regarding BBBO quotes, a limited number of Market Makers willing to provide depth to the order book, potential issues regarding financing activities, inadequate capital to execute on the company’s business plan, going concern caveats, and the potential inability to compete with larger companies due to limited financial and personnel resources. Please invest responsibly. We encourage individuals to only invest what they can afford to lose, up to a maximum of 100% of their investment.
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Comments (105)
Any news driving the 9.5% drop? If no, looks like a good price for stocking up.
seekingalpha.com/...
I understand the concept of patience. Perhaps I misunderstood the title of your first SA article on this stock:“Our Absolute Best And No. 1 Microcap Idea For 2021“
It has been quiet for some time with allm since the big spike in Jan. I was wondering if you have any updates on them, or if anything changed in your view/analysis. thanks