(Reuters) - Shares of Metabolix Inc MBLX.O tanked to a life low, a day after agricultural processor Archer Daniels Midland Co (ADM.N) terminated a joint venture with the bio-based plastics maker.
Metabolix shares fell 56 percent to $2.64 on Friday morning, making it the top percentage loser on the Nasdaq. They touched a life low of $2.58 earlier in the session.
The Cambridge, Massachusetts-based company’s shares were among the most traded stocks on the Nasdaq with over 6.3 million shares changing hands by 10:38 ET.
On Friday, Jefferies downgraded the company — which makes plastics, chemicals and energy from non-food crops like switchgrass — to “hold” from “buy,” saying the joint venture termination illustrates “one of the challenges faced by the capital-intensive renewables sector.”
On Thursday, ADM, the largest U.S. producer of ethanol, called off a joint venture for making a type of biodegradable plastics called PHAs, saying projected financial returns were “too uncertain.”
The joint venture Telles, established in July 2006, sold PHA-based bioplastics in the United States, Europe and other countries.
Following the termination of the joint venture, Metabolix said in a statement that it would restructure its bioplastics business in 2012.
“In order to start up a new PHA operation, Metabolix will need to obtain new supply agreements for corn sugar and fermentation capacity,” Jefferies analyst Laurence Alexander said in a note to clients.
Reporting by Divya Lad in Bangalore; Editing by Roshni Menon