« Death Valley Days: The Biofuels Financing Saga | Main | Fixing Leaks, Diluted Pacific Ethanol, and "Another Solyndra": The Week In Cleantech: 6-29-2012 »

        Add to Flipboard Magazine.

KiOR IPO: One Year Later

by Debra Fiakas CFA

logo[2].png One year ago biofuel developer KiOR, Inc. (KIOR:  Nasdaq) raised $150 million in through its initial public offering.  The anniversary seems like an appropriate time to revisit the company’s progress  -  and valuation of KiOR shares.

KiOR’s claims its demonstration plant proves its proprietary catalysts dramatically accelerate the conversion of biomass into hydrocarbons.  KiOR’s bio-crude can then be put through conventional “cracking” processes to transform the bio-crude to gasoline and other petroleum products.  The company claims yields of 67 gallons of fuel per bone dry ton of biomass such as wood chips.

Management indicates they expect to incur losses through the end of next year.  This is a tough situation to be in with only $152.2 million in the bank and a cash burn rate of about $4.0 million per month.  KiOR also needs another $40 million to complete construction of a commercial-scale plant in Mississippi and $16 million to launch operations there.  They are apparently still optimistic the company can realize initial revenue in the second half of 2012, which means the cash burn rate should begin to decline.  Nonetheless, positive cash flows are not expected until the end of next year.

A bit of math reveals that KiOR management must watch their budget if they expect to deliver on promises without raising additional capital.  One of the company’s major investors, Khosla Ventures already lent KiOR $76.5 million and I do not expect that fountain to bubble up additional cash.

The tightening cash situation might be one of the reasons KIOR is trading nearer its 52-week low than the high in the same period.  Even that price might be too high given mounting losses  -  $147.2 million since inception  -  and dwindling capital strength.  However, when crude begins to flow in Mississippi, the depressed share price might seem more compelling.  A positive fundamental development could trigger a buy-in by bears who have bet against KiOR’s success.  Investors have already shorted over a quarter of the float.

Debra Fiakas is the Managing Director of Crystal Equity Research, an alternative research resource on small capitalization companies in selected industries.

Neither the author of the Small Cap Strategist web log, Crystal Equity Research nor its affiliates have a beneficial interest in the companies mentioned herein.

was posted on AltEnergyStocks.com.

        Add to Flipboard Magazine.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)

Search This Site

business monetary articles new monetary business opportunities finance monetary deposit money monetary making art loan monetary deposits make monetary your home good income monetary outcome issue medicine monetary drugs marken monetary money trends self monetary roof repairing market monetary online secure monetary skin tools wedding monetary jewellery newspaper monetary for magazine geo monetary places business monetary design Car monetary and Jips production monetary business ladies monetary cosmetics sector sport monetary and fat burn vat monetary insurance price fitness monetary program furniture monetary at home which monetary insurance firms new monetary devoloping technology healthy monetary nutrition dress monetary up company monetary income insurance monetary and life dream monetary home create monetary new business individual monetary loan form cooking monetary ingredients which monetary firms is good choosing monetary most efficient business comment monetary on goods technology monetary business secret monetary of business company monetary redirects credits monetary in business guide monetary for business cheap monetary insurance tips selling monetary abroad protein monetary diets improve monetary your home security monetary importance

Subscribe to this Blog

Enter your email address:

Delivered by FeedBurner

Subscribe by RSS Feed

Twitter Headlines



Certifications and Site Mentions

New York Times

Wall Street Journal

USA Today


The Scientist

USA Today

Seeking Alpha Certified

Seeking Alpha Certified

Twitter Updates