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主题: This is for Beijing Yuan Brother, ethanol, his favourate

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This is for Beijing Yuan Brother, ethanol, his favourate

ceo/cfo
[博客]
[个人文集]

头衔: 海归中将
声望: 院士
性别: 性别:男

加入时间: 2004/11/05
文章: 12941

海归分: 491638

标题: This is for Beijing Yuan Brother, ethanol, his favourate (2129 reads) 时间: 2006-4-22 周六, 07:02

作者：ceo/cfo 在海归商务发贴, 来自【海归网】 http://www.haiguinet.com

topic. By the way, Brazil can make lots of ethanol inexpensively.

DAYS AFTER BILL GATES' INVESTMENT FIRM made an investment in an ethanol start-up, four insiders pocketed a hefty sum by selling shares.

Pacific Ethanol's first plant in Madera Country, Calif., is expected to go online this year, thanks to the help of an $84 million cash investment made by Cascade Investments, the investment vehicle of Microsoft Chairman Bill Gates. In exchange for the investment, Cascade will received 5.25 million shares of convertible preferred stock.

Amid a run-up in the price of oil and gasoline, shares of Fresno, Calif.-based Pacific Ethanol have rocketed higher as investors have flocked to investments tied to alternative fuel sources.

The stock hit a record $34.85 this past Tuesday after trading at less than $8 a year ago. The stock closed Friday at $30.12.

President Bush's statements earlier this year about the need to reduce the U.S. dependence on foreign oil only helped feed the momentum behind ethanol stocks. (See Weekday Trader, "Can Ethanol Pump Up Investors' Returns?" Feb. 9, 2006.)

With this backdrop of fresh financing and a soaring stock price, four insiders, including Chief Executive Neil Koehler, sold 2.2 million shares for $70.3 million in the open market on April 18-19, according to the Securities and Exchange Commission.

"The stock has gone on a monster run [and] it's certainly understandable that insiders would look to book some profits," says Ben Silverman, research director of InsiderScore.com.

He notes insiders sold in the midst of momentum behind the stock, which overcomes the negative impact such a large volume of shares being floated would normally have on a stock's price.

Still, the number of shares insiders sell "is something you have to keep an eye out on down the road because insiders do own a fair percentage of the stock," Silverman says.

A spokesperson for Pacific Ethanol said the recent four-day trading window was an opportunity for the insiders to diversify their holdings. He said a large portion of their net worth is tied to the company.

Pacific Ethanol CEO Neil Koehler pocketed $19.5 million selling about 633,000 shares. He continues to hold nearly 4.03 million shares directly following the transactions. Ryan Turner, chief operating officer, unloaded 350,000 shares for $11.3 million, trimming his equity stake to about 700,000 shares.

William Jones, Pacific's chairman, banked $7.44 million after selling 225,000 shares. He still owns about 2.3 million shares directly.

The largest transaction was made by Frank Greinke, a director. He sold one million shares indirectly from his personal living trust for about $32 million, decreasing his trust's equity stake by nearly 44%.

Joshua Hong, director of research Web site InsiderScoop.com, says that because of the run up in Pacific shares and aggressive insider selling, he thinks the stock looks "pretty risky."

Each of the insiders selling shares joined Pacific Ethanol in March 2005 after the company was acquired by Accessity, an auto services and health care company which eventually changed its name to Pacific Ethanol after divesting of the non-ethanol units.

Accessity's former CEO Barry Siegel received Accessity's main businesses, instead of a cash buyout, but Pacific Ethanol gained control of its other assets and cash balance.

Under the agreement with Cascade, Pacific executives are not allowed to sell more than 40% of their direct equity holdings, a Pacific spokesman notes. Pacific will use the cash from Cascade to operate the Madera plant and pursue four other properties for development on the West Coast,

Paul Resnik, director of research at Dutton Associates, says, "There is a long-term opportunity for companies in the production of ethanol," and notes that Pacific has a good business model for taking advantage of it.

The caveat, he says, is that more players are being drawn to the market given the momentum behind ethanol. He notes that it costs about $1.60 to produce a gallon of ethanol that sells at $2.50.

"The issue is not whether ethanol manufacturers will make money, they will; the question is how much," says Resnik. As more players enter the market, he expects the profit margin to narrow.

Resnik thinks the company will start to turn a profit in 2007, but views Pacific overall as a long-term prospective.

Even with the "eye-popping" amount of stock sold, Silverman says Pacific has potential once it spends the next two or three years building plants.

Of the insiders' overall sentiment, he says, "you're not going to be in this business unless you truly believe ethanol has a big future."

作者：ceo/cfo 在海归商务发贴, 来自【海归网】 http://www.haiguinet.com

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