NEW YORK ( TheStreet) -- Fortunes shift quickly for IPO darlings, and that's been the case with bioproducts companies that successfully went public in the past two years. Their stocks have crashed, in some cases, spectacularly so.
Now, an announcement from Archer Daniels Midland (ADM) that it's bailing out of a bioplastics joint venture -- it was going to use ADM agricultural feedstock to make bioplastics that would replace petrochemical products -- highlights that it's not just the stock values of bioproducts plays that can falter, but the funding and support for small bio companies from big balance sheet partners.
That's a red flag that has always been inherent in making a bet on the bioproducts class, but as of yet, hadn't been exposed in a publicly traded bioproducts company.
Shares of ADM's jilted bioplastics partner Metabolix (MBLX) fell by 55% on Friday -- the termination of the joint venture was announced after the close on Thursday.Shares of other recent bioproducts IPOs weren't impacted by the ADM bailout, but these companies have all fallen far from their IPO prices already. KiOR (KIOR) is down 34% since its 2011 IPO. Gevo (GEVO) is down 65% since its 2011 IPO. Amyris (AMRS), down 35% since its Oct. 2010 IPO. Solazyme (SYZM), down 48% since its June 2011 public offering. All of these bioproducts IPOs had one trading theme in common: They were great for a deal flip, and that's about it. Shares of each of these stocks went higher immediately after the IPO pricing, only to
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV