Gevo Land is the largest contract in the company's history
Gevo Inc (NASDAQ: GEVO) is making a run for the top in the market this morning, trading on gains of more than 60%. The gains come after the company announced long-term contracts that exceed $1.5 billion in revenue. Here’s what’s going on:
In a press release issued early this morning, Gevo said that it has entered into a binding Renewable Hydrocarbons Purchase and Sale Agreement on August 17. The agreement was signed with a wholly-owned subsidiary of Trafigura Group, Trafigura Trading.
Gruber says the agreement, where Gevo will supply Trafigura with renewable gasoline, brings Gevo to over $1.5B of revenue in long term contracts when added to the other contracts the firm already has in place
In the release, the company said that this is a long-term, take or pay contract and the largest contract in its history. At present, Trafigura is a leading independent commodity trading company with more than $171 billion in revenue.
The agreement states that Trafigura will take delivery of 25MPGY of renewable hydrocarbons. Most of this is expected to be in the form of low-carbon premium gasoline. The company will also take delivery of renewable jet fuel from GEVO.
Gevo is a very small company, currently trading with a market cap of around $50 million, and that’s after the tremendous growth seen today. Let’s not forget, the long term revenue from the agreement announced today is more than $1.5 billion. That’s massive, there’s no other way to put it.
Ultimately, with such strong revenues likely ahead, GEVO is a stock that’s well worth watching closely!
