Gevo shares rise in Nasdaq debut
NEW YORK (Reuters) - Shares of Gevo Inc (GEVO.O) rose as much as 16 percent in their Nasdaq debut on Wednesday after the company priced stock at the top of the expected range in its initial public offering.
The stock finished its first day of trading up 9.6 percent at $16.44 after rising as high as $17.53. Gevo is a renewable chemicals and biofuels company backed by Khosla Ventures.
"People are comparing Gevo to Amyris and that's what's helping Gevo today," said Francis Gaskins, president of IPODesktop.com
Amyris (AMRS.O), which makes renewable fuels and chemicals, was identified as a competitor by Gevo in a filing with the U.S. Securities and Exchange Commission. It went public in September 2010 and has risen more than 90 percent above its IPO price of $16. It also received financial backing from Khosla Ventures' funds.
"Amyris was a surprise winner," said Darren Fabric, managing director at IPO investment firm IPOX Schuster LLC. "Obviously, somebody believes there's growth in that sector and is hoping for the same type of return that they saw at Amyris."
Gevo, based in Englewood, Colorado, said it planned to make and sell isobutanol, which can be used in blended fuels and the production of plastics, fibers and rubbers. Although still in development stages, Gevo said it planned to start selling isobutanol commercially in the first half of 2012.
The company, which has yet to report a profit, also said in a regulatory filing that it planned to use proceeds from the IPO to gain access to ethanol facilities through acquisitions and joint ventures and to retrofit them for isobutanol production.
Comparing itself to Amyris in the alternative fuels sector, Gevo said its technology provides a 20 percent higher yield on feedstock, and so a 20 percent production cost advantage compared with Amyris.
On Tuesday, Gevo sold 7.15 million shares at $15 each, raising $107.25 million. It had planned to sell shares for $13 to $15 each. Underwriters on the offering were led by UBS Investment Bank, Piper Jaffray and Citi.
(Reporting by Alina Selyukh and Clare Baldwin, editing by Gerald E. McCormick, John Wallace)