$GEVO Ups Authority for Share Issuance After the Close — A Perfect Short Squeeze Fast Approaches

This is a very small company, with just ~1m shares outstanding. The stock has been spiraling higher, so they got together with their underwriter to get authority to issue shares. From a business point of view, this is exactly what they should be doing.

From a shareholders point of view, this is dilutive and possibly a negative for shares.

On June 25, 2018, Gevo, Inc. (the “Company”) entered into an amendment (the “Second Amendment”) to the At-The-Market Offering Agreement, dated February 13, 2018, as amended on June 20, 2018 (the “First Amendment”) (as amended, the “Sales Agreement”), with H.C. Wainwright & Co., LLC (the “Agent”), which provides for the sale and issuance from time to time of common stock of the Company in an “at-the-market” offering (the “ATM Offering”). The Second Amendment, among other things, provides for an increase in the amount of common stock for issuance and sale under the ATM Offering by up to an additional $7.995 million of shares of common stock (the “Shares”). The previous Sales Agreement provided for the sale and issuance of up to $15.0 million of shares of common stock in the ATM Offering. To date, the Company has issued 1,833,575 shares of common stock under the ATM Offering for gross proceeds of approximately $15.0 million, including 1,828,367 shares of common stock for gross proceeds of approximately $15.0 million since March 31, 2018.

The company authorized an ATM offering for ~22 million shares, a comical amount considering the present market cap. But they did this for the long term, so don’t think for a second the company is going to hit the bid tomorrow. They’ll sell when they need to and I’ve seen plenty of pressers like this get misinterpreted, hit hard in the after-hours, only to recover and more the following day.

Considering the weak market, I’m guessing this trades lower by 7-15% tomorrow. However, in the event it happens to reverse losses and trade up, it will trade up spectacularly — in grandiose fashion. This of course is head in ass type thinking — but it’s entirely legitimate. After all, the company ALREADY ANNOUNCED authorization of 15 million shares. This presser merely upped that to 22. Again, a non-event, gigantic nothing-burger, but it has led to a 9% drop in shares in the after hours.

Logically, this news should not negatively affect the share price, since they’re no closer to selling 1 million shares, as they are 15 or 22 million. It’s a fucking joke, believe me.

We’ll try our hand at short squeezing this tomorrow.

Sleep tight.