Green Light Capital’s David Einhorn likes ethanol even though corn prices have soared. He likes it so much he increased his stake in BioFuel Energy Corporation by over 10%. He now owns more than a third of the company. Obviously, Einhorn must know something about ethanol and or this company that we don’t. Maybe he just has a fleet of biofuel powered cars he needs to fuel for a cross country family trip. Yeah, right.
But this is no joke. Just look at the stock. Biofuel Energy Corp’s stock, with the ticker BIOF, is screaming higher on the news, up over 66% just today. Wow.
Einhorn reported a 36.2 percent stake in the company, according to a regulatory filing on Thursday. He had a stake of 25.5 percent in Biofuel as of June 30.
Shares of Biofuel, which is valued at $19 million, had been down 76 percent this year as the worst U.S. drought in half a century led to lower supplies of and higher prices for corn, hurting ethanol producers’ margins.
The drought has also revived the fierce food-versus-fuel debate.
Livestock, food producers and others are calling on President Barack Obama to abandon — at least temporarily — a government mandate that requires converting more than a third of the U.S. corn crop to ethanol. (Reuters)
Next we’re going to hear Einhorn is buying up solar stocks, like First Solar, the one he most famously shorted and made piles of money on.