The Bioeconomy Investor and the Decline in Information Channels, Company Awareness and Fundamental Research
by Jim Lane (Biofuels Digest) nvesting in the BioEconomy is a complicated endeavor, but can offer significant opportunities for the informed investor. The industry drivers are numerous and presents a puzzle that demands quality information flow, insight and analytics to succeed. Three storylines this week offer us evidence of a growing information gap, with fewer channels for insight and information to flow between companies and investors, that is beginning to impact the industry’s ability to raise capital in a significant way.
At BioAmber: rising sales, new financing, a dangerous put option retired, and a tanking stock price
First, BioAmber got roughed up in the public financial markets. Trading at $2.70 per share a month ago, the stock has tumbled to $0.523 as of yesterday. What happened?
Over at Amyris: fresh capital, revived strategic interest, strong product sales growth, and a tanking stock price
In California, Amyris revealed the closing of the $50 million second and final tranche of its previously announced financing. The second tranche of $50 million was led by a $25-million investment from Koninklijke DSM with the remaining $25 million contributed by Vivo Capital.
Yet, shareholders haven’t been exactly enthralled with the new investment. Shares in Amyris dropped 9.15% to $2.85, and shares have tumbled from an effective price of $10.50 in mid-April to $2.78 today.
If you happened to spot the BioAmber investor call transcript this week, you’ll note two equity analysts on the call, Cowen & Co’s Jeffrey Osborne and AltaCorp Capital’s Dirk Lever. These are bright stars and smart cookies, but where’s the rest of the pack? Raymond James’ Pavel Molchanov continues to track an astonishing range of companies — and really, you wonder when he sleeps — but these people are the exception rather than the rule.
We believe there has been a fundamental shift in the investment industry that has led to fewer information channels, a shrinking knowledge base, declining company awareness and less fundamental research being conducted on emerging growth companies, including the BioEconomy.
This change impacts not only the companies themselves, but also current shareholders and potential investors. Driven by significantly less active sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community and is especially relevant for smaller institutions, investment advisors, family offices and the average investor. The net result being fewer channels for insight and information to flow between companies and investors.
The solution is a new site that offers that channel channels for insight and information to flow between companies and investors — to bring that to you, The Digest has partnered with a team headed by formed Raymond James equity analyst Shawn Severson. It’s called Bioeconomy Investor, and this one is not a news site, though news of course it will reflect, absorb and analyze. It is a site about companies and value-creation in the advanced bioeconomy.
What does it look like?
In the BioEconomy Investor Universe you’ll see Fuels, Chemicals & Materials, Nutrition, AgTech, Raw Materials, Genetics & Genomics READ MORE