The largest publicly-traded company in Sacramento, Pacific Ethanol, saw its shares rise more than seven-fold this year, including a 26% gain on Wednesday.
Pacific Ethanol is one of the biggest makers of ethanol, a low-emission renewable fuel made from corn. But in response to the COVID-19 pandemic, the company has converted some of its manufacturing to making alcohol for hand sanitizer.
Sacramento Business Journal Editor-in-Chief Adam Steinhauer spoke with CapRadio’s Steve Milne to explain what this means for the company.
Pacific Ethanol’s stock had been trading for under $1 this year until July, when it switched production over to hand sanitizer.
The company had been struggling as trade tensions between the U.S. and China cost it its foreign markets. The Trump administration has also been granting fuel refineries exceptions from a federal requirement to blend ethanol into standard gasoline. The company had recently been selling off assets to pay its debts.
Despite this, Pacific Ethanol turned a profit for the first time in more than a year after it made the switch to manufacturing high-grade alcohol. Multimedia financial services company The Motley Fool reported that Pacific Ethanol may convert 20% of its manufacturing to just alcohol production, which may drive it to a full-year profit for the first time in three years.
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