Pacific Ethanol Going Down? (PEIX)

Once the darling of investors Vinod Khosla and Bill Gates, Pacific Ethanol, Inc. (NASDAQ:PEIX) is now trading at just 5% of its share price one year ago. The company has just received a month’s grace period from its as it continues to seek new loans. Any takers?

Pacific has also closed two of its plants, one in Idaho and another in California. Each has a capacity of 60 million gallons/year, and the two join a second California plant with 40 million gallons/year of capacity that was closed in January.

In its announcement, Pacific included this statement: “Pacific Ethanol has achieved its goal of 220 million gallons per year of ethanol production capacity in 2008 and plans to increase total production capacity to 420 million gallons per year in 2010.”

With just one plant in operation, it’s hard to see how that will happen. Perhaps its loaves-and-fishes time at Pacific?  Shares were briefly up 8% at $0.37.

Paul Ausick
March 2, 2009