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David Einhorn Buys More BioFuel Energy Corp
Posted by: Holly LaFon (IP Logged)
Date: September 10, 2012 03:47PM
David Einhorn increased his stake in BioFuel Energy Corp. (BIOF) by 62.85% at the average price of $3 on 09/06/2012, according to GuruFocus Real Time Picks. He owns 2,212,274 shares. The stock price has changed by 55%. The purchase brings his total holding of the company to 13.6%.
Denver-based BioFuel Energy Corp. is a publicly traded company founded in 2005 that produces and sells ethanol, distillers grain and corn oil through two production facilities in Nebraska and Minnesota. BioFuel Energy Corp. has a market cap of $16.2 million; its shares were traded at around $4.42.
Einhorn first bought the company in the second quarter of 2012, acquiring 1,358,437 at that time. The company’s stock has slid significantly over the last year. In May, BioFuel announced that it received a letter from Nasdaq providing it a time extension for its stock to go above the required $1.00 bid price for listing on the exchange. In June, it held a 1-for-20 reverse split.
In the second quarter, BioFuel posted its second quarter of steeper losses. In the second quarter of 2012, its net loss was $12.4 million, compared to a net loss of $8.3 million the prior year. Revenue was $122.8 million, compared to $168.5 million the prior year – a 27.1% decline.
Sales declined mainly due to a decrease in ethanol income from lower market prices for ethanol and a decrease in the quantity of ethanol produced and sold. The company reduced production toward the end of the quarter to maintain its margin in an environment of rising corn prices. “July was the lowest month for ethanol production in the last two years,” according to the U.S. Energy Information Agency.
BioFuel Corp. said in August it did not believe its crop supply would be affected by a drought that has been afflicting the U.S. this summer and driving up corn prices. The U.S. government currently requires 13.2 billion gallons of ethanol to be blended into fuel, which equates to about 40 percent of U.S. corn crops in a normal year.
BioFuel Corp.’s stock price has increased 39% since Einhorn disclosed his stake increase.
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Guru Discussed: David Einhorn: Current Portfolio, Stock Picks
Stocks Discussed: BIOF,