Gevo: Cash Issues Resemble Another Big Loser, Dilution Pro -- Viggle

by Sonya Colberg, Senior Editor - 5/13/2015 1:29:25 PM

TheStreetSweeper issues a Gevo (GEVO) Quick Hit.

Just a month after Gevo’s board approved the desperate 1-to-15 reverse stock split that pushed the stock from ~$0.18 to ~$2, Gevo may be primed for a stock offering.

The stock is rallying today, yet the renewable fuels company is money-starved with only $4.4 million in cash. As it burns through about $10 million per quarter, it may have problems meeting its financial obligations.

This looks like another Viggle (VGGL) situation. Viggle, too, faces massive debt, low cash and going concern issues. We tweeted a VGGL update on Monday, as shown  below:

“Troubling $VGGL rally on earnings! Cash dropped to $715,000. Burns ~$6m/Q, now needs $19m over current cash. We’re short.”

Surprise, surprise. Today the company filed a registration statement for $40-million of stock. Since Monday, the stock has dropped as much as ~30 percent.

We’re feeling a sense of déjà vu.

Indeed, Gevo just reported a net loss of $7.3 million and accumulated losses of $310.6 million, and, while it anticipates $6 million in proceeds from warrants, it’s feeling the pressure of interest payments for $26 million in debt coming up in 2017 and $24.9 million in 2022.

Gevo’s new 10-Q raises “substantial doubt” about the company’s ability to continue as a “going concern,” here. Stay tuned.

* Important Disclosure: The owners of TheStreetSweeper hold a short position in GEVO and stand to profit on any future declines in the stock price. 

Editor's Note: As a matter of policy, TheStreetSweeper prohibits members of its editorial team from taking financial positions in the companies that they cover. To contact Sonya Colberg, the author of this story, please send an email to [email protected] or [email protected].

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