We noticed Verenium Corp. (NASDAQ: VRNM) over at our "price/volume spike" this morning and realized what the cause was. The company’s stock is gapping up significantly after announcing that it has secured a biofuel production pact with BP plc (NYSE: BP). The pact will lead to cellulosic ethanol development and commercial production using non-food stocks and Verenium will receive $90 Million in funding from BP over the next 18 months.
Of this $45 million will be available to Verenium in the next 12 monthsand upon closing it will receive $24.5 million. Thereafter Vereniumwill receive $2.5 million per. The companies are expected to negotiatea second phase contract for beyond the 18 months target dates.
We have still seen under 10,000 shares trade so far pre-market, but thelast trade showed a gain of 33% to $2.70 this morning. The currentindications are slightly higher than that.
Its 52-week trading range is $1.05 to $6.95, so it isn’t as though thisis a low-volatility stock. On average days it trades about 426,000shares, although the thin volume pre-market is high because it rarelytrades any in the pre-market and after-hours trading sessions.
Jon C. Ogg
August 6, 2008
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