For the third consecutive week, small biofuels producers were getting plenty of attention from the market with shares for MagneGas Corporation (MNGA) , BioFuel Energy Corp., (BIOF) , and Solayzme (SZYM) all moving higher from the opening bell.
Last week, both MagneGas and Slayzme watched as shares sank after the market spent some time digesting their respective fund raising efforts based on new stock offerings. Most notable of the trio was BioFuel Energy, whose shares had nearly doubled by midday, carrying the momentum generated the previous week with the news that David Einhorn’s Greenlight Capital disclosed that it had upped its stake in the small producer of ethanol, corn and grains oils from 26 percent to 35 percent, and had further suggested the company acquire equity in real estate developer JBGL Capital, as well as JBGL Builder Finance, both owned by Greenlight. The price tag for the proposed acquisition was set at $275 million in cash and stock.
The vote of confidence from the Einhorn camp generated a great deal of attention in Friday’s late session, and halfway through Monday trading shares had gained some 89 percent to $5.91, and the 9.2 million shares that changed hands represented just shy of 39 times average volume.
Florida’s MagneGas has been stubbornly demanding the attention of investors after the stock sold off heavily following last week’s announcement of its own intent to raise funds with a new offering of shares. Not two weeks ago, the company saw shares climb sharply upwards in the wake of its announcement that it had signed contracts for its fuel to be used to power the torches being used in a number of large demolition projects in the Northeastern US. Following on that, the plucky $41 million “major integrated oil and gas” firm also unveiled the mobile version of its waste-liquid processing system at a biofuel industry conference, claiming that that tests in the US would begin at some point in the near future.
Monday’s gains were sparked by yet another announcement that revealed the company would be establishing a 50/50 owned joint venture with Australia’s Future Energy PTY with the goal “the co-combustion of MagneGas fuels with hydrocarbon fuels to reduce emissions and increase energym," thereby expanding its operations in the country beyond coal combustion to include aviation fuel, oil, and liquid petroleum gas.
By mid-session, shares had added 25 percent to $1.68, on 7.6 times the company’s average daily volume.
Finally, Solayzme, was climbing higher, although far more modestly, by midday as the information it released last week, about it’s new algae-based fuel for drilling oil and gas wells and that was overlooked as a result of the new stock offerin, about its algae-based lubricant for reducing in drilling friction that could potentially save drillers a great deal on operational costs. Shares for Solayzme were up 2 percent to $11.50 each in midday trading.
In terms of returns, alternative energy and and energy efficiency stocks produced the best returns of the alternative energy space, behind the much larger solar industry, and far ahead of wind and smart-grid industries. All three of Monday's biofuels gainers are getting set to roll out new and more ambitious projects in 2014.