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Summary:

Bill Gates is making good on his plans, announced last November, to sell off his 20.6 percent stake in Pacific Ethanol. Cascade Investment, the private investment and holding company controlled by Gates, has been whittling down the stake trade by trade, according to recent filings with […]

Bill Gates is making good on his plans, announced last November, to sell off his 20.6 percent stake in Pacific Ethanol.

Cascade Investment, the private investment and holding company controlled by Gates, has been whittling down the stake trade by trade, according to recent filings with the SEC.

The latest round of selling began with the sale of 300,000 common shares into the market on May 28 . The next day, Cascade converted 1 million shares of preferred stock into 2 million shares of PEIX common stock worth $8 a share each.

Cascade then began to immediately sell those common shares off at a huge discount – in the market, investors paid between $3.40 and $3.75 a share for them. By last Friday, Cascade had sold off a total of 1.4 million shares in three days, or roughly $5 million worth of Pacific Ethanol stock.

The sales came only a few days after Pacific Ethanol reported surprisingly strong earnings for the first quarter, only to erase most of the stock gains with an announcement it would dilute investors with a new stock offering. It seems that Gates may want to cash out some of his stake in Pacific Ethanol before that dilution took effect, even if it meant selling below the $8 a share price that he converted his shares at.

Earlier, in April and May, Cascade had sold more than a million shares in the market, between $3 and $4 a share. All told, Bill Gates has come close to cutting his stake in the company in half over the past several weeks.

A Sacramento Bee story quoted Pacific Ethanol CEO Neil Koehler as philosophical about the steady stock sales from what was its largest investor.

[Gates'] original stake was 20 percent, and “he’s well on his way to 10 percent,” Koehler said. Gates’ $84 million investment in 2005 was a big early boost to Pacific Ethanol, but Koehler said he isn’t particularly bothered by Gates’ recent sales.

“That’s the great thing about markets; people are free to buy and sell,” he said.

These days, they are a little freer with their sales. Pacific Ethanol closed Tuesday down 4 percent at $3.30.

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  1. Bill Gates Says See Ya to His Pacific Ethanol Stake – GigaOM Wednesday, June 4, 2008

    [...] Edit Staff, Wednesday, June 4, 2008 at 1:24 PM PT Bill Gates has been slowly selling off his 20.6 percent stake in ethanol producer Pacific Ethanol. Gates’ private investment and holding company, Cascade Investment, has been whittling down its stake trade by trade, and by last Friday Cascade had sold off a total of 1.4 million shares in three days, or roughly $5 million worth of Pacific Ethanol stock. The bloom has sure fallen off the ethanol rose, as the margins for ethanol makers have been growing way thin. For the full story, go to Earth2Tech. [...]

  2. Idiot Inc. » Bill Gates runs away from Pacific Ethanol Wednesday, June 4, 2008

    [...] managed investment fund, Cascade Investment, has been selling off its stake in Pacific Ethanol at a loss. Naturally, the stock has hit a 52-week low ($3.15) from a high of [...]

  3. Ethanol is a silly investment because its primarily subsided by US Govornment Corn Subsidies and corn needs to be converted into sugar (mashed), fermented and distilled to create ethanol so the energy inputs out weigh the energy outputs .When the industry moves to biodiesel from algae or uses reverse osmosis to extract the ethanol from the wash (fermented liquid) then there might be a sea change until then its a Industry propped up by keeping the price of corn low while the US government props up the industry with subsidies .

  4. The latest ethanol non-fan? Bill Gates » Hybrid News Thursday, June 5, 2008

    [...] is taking a big hit to get out of his ethanol investments. According to the Sacramento Bee and Earth2Tech, Gates’ investment firm, Cascade Investment, has sold off over two million shares of Pacific [...]

  5. The latest ethanol non-fan? Bill Gates | Electric Powered Cars Thursday, June 5, 2008

    [...] is taking a big hit to get out of his ethanol investments. According to the Sacramento Bee and Earth2Tech, Gates’ investment firm, Cascade Investment, has sold off over two million shares of Pacific [...]

  6. Ethanol Business – Ethanol Business And Benefits Of Dynamic Renewable Fuel Thursday, June 5, 2008

    [...] Earth2Tech reports that Gates’ investment firm, Cascade Investment, has been selling off large chunks of stock at a big loss in recent weeks. And Neil Koehler, Pacific Ethanol’s chief executive, tells the Sacramento Bee that he is not concerned that the Microsoft co-founder is reducing his position in the company. Gates previously owned about 20%, though it is dropping into the 10 percent range, according to the Bee. [...]

  7. Saundra Hummer Monday, July 7, 2008

    We have run into serious problems with Ethanol.

    We have a lawn business which requires several pieces of equipment which are powered by small gasoline motors.

    Ethanol is known for eating up plastic, rubber, and fibre glass. Our problem is with plastic, as there are plastic filters and plastic floats on the fuel lines. Then to there is the fact that we were carrying our gas around in plastic gasoline cans, our good heavy metal ones having been stolen. Now we learn that gasoline with Ethanol as an additive sitting in plastic cans can cause damage to your motors, as can any plastic or rubber which comes in contact with it.

    Ethanol in known to bind with water, and therefore it also ruins your valves and other parts, carburetors, etc.

    What are we do when we live where only gasoline with Ethanol will be available? Will we need to shut down our business?

    We have already had damage done to several pieces of equipment by Ethanol, some repairable, but at a price, and other items have been ruined to the point where it is cheaper to buy new than to pay for parts and the repairs.

    Will there be recalls? Will we, (and others) be compensated for our losses? Will equipment be replaced with metal parts haven taken the place of plastic, rubber and fiberglass?

    We hadn’t known of this, however, thinking back on how the fellow selling us a new motor acted, we know he knew. Yet he didn’t inform us, nor did he tell us that there might be stations around that still do have Ethanol free gasoline, and that they will have until Sept. 15, 2008. Had he been above board, we could have at least avoided this problem until then.

    Small airports have Ethanol free gasoline, however it sells for over $7.00 a gallon, and is higher in octane than the 87% Octane small motors are designed to run on, yet that’s less expensive than paying for all of the equipment loss and repairs. It won’t harm the motors they are telling us, but they will (strangly) lose power. We will also have to sign a paper promising not to use it for anything but off road.

    If it is illegal to use Ethanol in airplanes due to it’s inherent problems. Then why not cars?

    Is driving down a crowded rush hour freeway any safer? What would happen to a family in a stalled out or on fire car (It is know to cause fires.)? Say, during rush hour traffic? Like when you’re approaching and along side LAX on a Friday night? I mean to tell you, it could be the worst scenario possible.

    If illegal in airplanes, is it any safer in cars? Without a car length ahead of you or behind you and you stall out when in high speed, and terribly crowded conditions?

    Already class action lawsuits have been filed, one by a fellow who incurred over $35,000.00 repairing his boat. Fibre glass gas tanks were part of his problem.

    Do you have an ATV, a snow mobile, a wave runner, or any other small motor piece of equipment? If so, you need to think about what you can do to remedy what is going to happen to your pocket book, whether or not it is happening due to small time damage or, as in our case, lost income plus unexpected and uncalled for expenses. We see no solution, it will take some quick and big time changes to prevent everyone from being hit by this, and hit by this, and hit by this.

    Good luck to us all,

    Saundra

  8. Bill Gates Trash Talks Bill Gates « Earth2Tech Friday, August 1, 2008

    [...] has not only turned into an influential investor in certain green stocks, but is pretty much devoted to managing Gates’ massive booty from his decades of pillaging [...]

  9. Bill Gates invests in algae fuel | EnergyModo Wednesday, September 17, 2008

    [...] Investments. The firm invested in Pacific Ethanol, but later sold its shares as the company’s stock price fell. [...]

  10. Bill Gates invests in algae fuel | An Inconvenient Blog Wednesday, September 24, 2008

    [...] The stake in Sapphire Energy is not the first foray into alternative fuels for Gates’ Cascade Investments. The firm invested in Pacific Ethanol, but later sold its shares as the company’s stock price fell. [...]

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