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Gates set to dump half his stake in Pacific Ethanol
By Dale Kasler - dkasler@sacbee.com
Last Updated 6:18 am PDT Tuesday, June 3, 2008
Story appeared in BUSINESS section, Page D3
Bill Gates is on track to dump half his original stake in Sacramento's Pacific Ethanol Inc., reflecting growing investor dismay with the industry.
Gates' Cascade Investment LLC, an early major investor in Pacific Ethanol, sold 1 million shares last week at prices ranging from $3.45 to $3.83 a share, according to filings with the Securities and Exchange Commission. That's in addition to the roughly 1.3 million shares he sold over a three-week period starting in late April.
The SEC filings suggest Gates is taking a loss on Pacific Ethanol. He has been converting his preferred stock into common shares at $8 a share, and then selling the common stock at less than $4 a share.
Neil Koehler, Pacific Ethanol's president and chief executive, said he wasn't sure what percentage of Pacific Ethanol's stock is held by Gates. But Koehler said it looks like Gates has converted about half of his preferred stock into common shares for the sole purpose of selling those common shares.
His 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.
He noted that he and three other insiders, including his brothers and company Chairman Bill Jones, recently purchased about $5.8 million in Pacific Ethanol stock through a private sale. The company, pressed for cash, has raised about $75 million through private stock sales since late March.
A representative for Cascade couldn't be reached for comment Monday.
Pacific Ethanol's stock closed Monday at $3.44, down 10 cents, on the Nasdaq market.
About the writer:
- Call The Bee's Dale Kasler, (916) 321-1066.
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