Biodiesel pure-play

I’ve written an article for Alternative Energy Stocks on Blue Sun Biodiesel’s expected merger with M~Wave.  The article begins:

On January 29th, M~Wave [NASDAQ:MWAV] and private vertically integrated Biodiesel distributor Blue Sun Biodiesel announced a merger between the two, with Blue Sun becoming a division of M~Wave, and the merged company being renamed Blue Sun Holdings. Managerial control will also pass to “certain directors and the officers of SunFuels.”

If this merger goes through as planned in the second quarter of 2007, US investors will have their first opportunity to invest in a stock focused on a biofuel which is much less controversial among environmentalists than corn-based ethanol. Estimates of the well-to-wheels Energy Return on Energy Invested (EREoI) for biodiesel range from about 1.93and up, depending on the feedstock, although few numbers are available. The most commonly quoted EREoI for biodiesel is 3 or 3.2, but I’ve never found a reputable reference for that, and it will clearly vary widely depending on the oil feedstock, with waste oil being “best.”

 Click here to read the whole article.

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2 Comments

  1. Thanks for the article, which led me to your website. I tried to post over on Alternative Energy Stocks, but don’t know if it will go live (or if you’ll see it there, Tom).

    Would it make sense to buy into MWAV before the Blue Sun Holdings merger? i.e. is there any reason the merger might not go through, or perhaps more importantly, does it make investment sense based on merger agreement/ratios for the two companies.

    I also wonder what value add MWAV is bringing to the table for Blue Sun. I don’t see it in what you’ve written here. I do see the Blue Sun – ARES synergy.

    Finally, is it common for microcap stocks that are not profitable to pay their officers three figure salaries?? (MWAV)

  2. tomkonrad said

    I consider it risky, but possibly a good gamble to buy in before the merger… I expect the stock will be added to the portfolios of most of the alternative nergy ETFs and mutual funds… if the merger goes through. Getting in before all that buying may turn out to be a good deal (that’s why I own the stock… but not very much.) On the other hand, there will probably be a lot of selling by current owners of Blue Sun who want liquidity after being locked up for 1-4 years, depending on when they invested.

    Salaries for microcap unprofitable company management can be all over the map. But, at least if hte merger goes through, most of them will be out the door (probably with a golden handshake.)

    MWAV is bringing a NASDAQ listing to the table. This is a fairly big deal, since Sarbanes-Oxley.

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