Why KiOR's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of renewable fuel company KiOR fell 10% today after reaching an operational milestone.

So what: The company has made its first shipment of cellulosic gasoline and diesel and has been operating for 30 days. The company's first shipment since March was made on June 28, and now we should see continuous shipments going forward.

Now what: This should be good news for the company but shares sank today as investors sell the news. We also don't know just how much product is being made so it's hard to gauge how much revenue the company will generate in the third quarter.

The challenge here is that analysts are expecting $1.17 in losses per share this year and another $0.92 per share in losses next year. The company will have to grow rapidly to live up to its $500 million market cap -- I just don't see how it will do that in the current environment.

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The article Why KiOR's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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