Saturday, November 17, 2012

New York Times Article Makes KIOR Stock YoYo

I have blogged several times that KIOR an alternate green fuels company is bound to fail based on my chemical engineering analysis of their technology.  The New York Times and their long time energy reporter Mr. Mathew Wald caused a market disruption in the trades of KIOR stock on the NASDAQ on Wednesday November 14th.  The stock closed at $6.42 on Tuesday, November 13.  Just 30 minutes into trading, by 9.59 am on the 14th the stock was up by $1.40 a share and trading at $7.82.  The volume of shares traded was heavy.   The reason for the uptick was an article written by Matthew Wald in the New York Time both in print and online that was titled Fuel From Waste, Posed at a Milestone.

I quote the following from that NY Times article:
“So far, such alternative fuels have not moved beyond small pilot plants, despite federal incentives to encourage companies to develop them.
But that could be about to change.
Officials at two companies that have built multimillion-dollar factories say they are very close to beginning large-scale, commercial production of these so-called cellulosic biofuels, and others are predicting success in the months to come.
In Columbus, Miss., KiOR has spent more than $200 million on a plant that is supposed to mix shredded wood waste with a patented catalyst, powdered to talcumlike consistency. Its process does in a few seconds what takes nature millions of years: removes the oxygen from the biomass and converts the other main ingredients, hydrogen and carbon, into molecules that can then be processed into gasoline and diesel fuel.
KiOR aims to turn out 13 million gallons of fuel a year and has already lined up three companies to buy its output, including FedEx and a joint venture of Weyerhauser and Chevron. KiOR said on Thursday that it had begun producing what it called “renewable crude” and intended to refine that into gasoline and diesel that it would begin shipping by the end of the month.”

By close of trading on November 14 KIOR was all the way back down to $6.50 a share when investors realized that the New York Times article was simply a glowing attempt by the darling of the main stream media to portray KIOR in the best possible light and that the article simply was a rehash of company news releases and had no real news worthiness.   KIOR stock closed the week on Friday November 16 at $6.19.

What is even more disturbing is that Matthew Wald blogged for the New York Times on November 8 in an article titled Turning Wood Chips into Gasoline.   I quote from this article:
“Yet even when solar and wind power work well, they mostly serve as a substitute for natural gas, which is quite cheap at the moment. Renewable substitutes for natural gas do not replace imports from unstable places like the Persian Gulf, as the biofuel would.
But details on any challenges faced by the $200 million plant were not forthcoming. Fred Cannon, the company’s president and chief executive, said KiOR had “experienced normal start-up issues” but that they did not involve its proprietary process.”

One has to believe that Mathew Wald had a change of heart about Kior’s prospects in the five days between the 8th and 13th of November.   He went from “details on any challenges faced by the $200 million plant were not forthcoming” to “but that could be about to change”.

The New York Times must take responsibility for their reporter Mr. Wald and for both articles they published.   The second article caused some to win and some to lose their money on KIOR in trading of the stock on November 14th.

In other “green news” the President and AG Holder will claim success that BP admitted to a felony and settled with the US justice department for $4.5 billion dollars as fines for their pollution of the Gulf of Mexico.   What will not be reported in the Main Stream Media is that BP gave up on their advanced cellulosic ethanol project in Florida and that the advanced biofuel industry is another thermodynamic non-starter.

For the record Condi Rice, the ex Secretary of State, is on the board of directors of Kior.