With their announcement yesterday, shuttering a major production line - biodiesel production, the probability of my upside case is greatly reduced. I no longer feel that the investment is attractive.
This is why knowing your downside well matters. In this case, trading below TBV provides this company with a lot of downside protection. I didn’t lose money on this trade.
Also the company stated that the expiry of the BTC made it uneconomical to produce, but this is when the 45Z credit (replacement) was close to being approved. Now that it has been approved they are open to starting production, but they knew that at the time right?
Now they state that it is uneconomic to produce due to high feedstock costs. It seems to be that is the real reason they stopped production, but they didn't state it like that. Maybe they were trying to add pressure to their lobbying efforts for BTC? I dont really get it.
With their announcement yesterday, shuttering a major production line - biodiesel production, the probability of my upside case is greatly reduced. I no longer feel that the investment is attractive.
This is why knowing your downside well matters. In this case, trading below TBV provides this company with a lot of downside protection. I didn’t lose money on this trade.
On the other hand refiner exemptions were smaller than expected and the RINs will compensate for the higher feedstock/lower oil price spread.
I am keeping an eye on it.
Also the company stated that the expiry of the BTC made it uneconomical to produce, but this is when the 45Z credit (replacement) was close to being approved. Now that it has been approved they are open to starting production, but they knew that at the time right?
Now they state that it is uneconomic to produce due to high feedstock costs. It seems to be that is the real reason they stopped production, but they didn't state it like that. Maybe they were trying to add pressure to their lobbying efforts for BTC? I dont really get it.