Thursday, September 19, 2013

Kior Presents Nothing New





UPDATE   after the close of the market today KIOR updated on fuel production at their site in Columbus Miss.


http://finance.yahoo.com/news/kior-provides-operational-columbus-facility-200500166.html


In July and August they shipped almost 100,000 gallons of fuel (99,175 gallons).  Through the end of August they have shipped 199,071 gallons.  They have produced 357,532 gallons through August 31, 2013.  This means as of August 31 they had 158,461 gallons in inventory.  Thy may ship 100,000 gallons in September for total shipments of 200,000 gallons for the quarter.


Wow Condi and Vinod must be scrambling to raise money that they will need in 10 days given their cash burn of approximately $10 million a month.  New investors would value the company at about 25 cents on the dollars and the plant in Columbus should be values at $50 million not $200 million as it is on the books.  So the question is how much goodwill will a new investor pay for the hope that the technology can really yield 72 gallons of fuel per bone dry ton of wood when all it has achieved to date is between 15 and 20 gallons per bone dry ton.


This will be exciting to watch.






 
I took a look at the presentation that Kior gave at the Credit Suisse conference a couple of days ago.  Nothing new is in the deck.


I do not know what the CFO stated but the stock has remained about where it was on Friday the 13th before the presentation.  So I have to imagine those present at the presentation were not moved by CFO story.

This presentation was a smokescreen for the real work the CFO and his bosses Condi and Vinod are doing to find funds to keep the company going. 

The one pearl of wisdom I got from the slide deck is that the cost of pine expressed as cost per 5.8 million BTUs is $24 today.  The cost of pine has not risen much since 2000 when the cost was $21 expressed on the same basis.  Tells me owning pine forests is a crappy business and could well be because the pulp and paper industry is in the doldrums. 

The $24 figure works out to be $4.14 per million BTUs.  Natural gas is trading at $3.75 per million BTUs and natural gas is a far better feedstock to make chemicals than wood.  That besides the fact that what Kior is attempting to do is almost impossible has made the stock drop to 10% of its IPO price two years ago.  

News on Fisker the Al Jazeera Gore car company is that the DOE will auction off the debt that Dr. Chu and Mr. Obama supported them with.  The amount we will recover will likely be less than 10 cents on the dollar.  This will allow Fisker to move on so to speak and find a buyer without “government interference”. 


Looks like the Musketeer at Teslacle is the only success story in the “green” space.  I have to hand it to Elon he went upscale, charged a bunch for his Model S, took as much subsidy from tax payers, and built a quality car that has limited range and really gets 22 MPG.  Meanwhile my 14 year old C 280 is partying like it is 1999. I can say I have a 20th Century car and I am the Prince of Thermo.  Billy Preston sang "nothing from nothing leaves nothing".  Billy was the Prince of Soul.

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