I don't know, PEIX dropped from the $23 range in early September when the drop in oil started to kick in to the $12 range. You asked why it didn't drop 25-30% but it already has and then some.
Depending on what prices do over the balance of December, PEIX is posed to post a crush margin very close to last quarter, but without any negative warrant fair value adjustment this time. Even if the price climbs considerably (it closed @ 13.96 on Sept 30th) there were only 1M warrants left at the end of Q3. To top that off, the analysts have earnings estimated at $0.19 for Q4 at present.
To top that off, to date the entire quarter has pretty much been the opposite of what Kinergy faced in Q3. They've been buying and reselling in a market where California and related Western State prices for ethanol climbed from lows of $1.65 in the first days of October to recent highs of $2.70. Pretty hard for Kinergy not to turn over some good coin in that climate. The price has softened somewhat the past 4 trading days with the end of Dec futures sales, but at this time of year all it takes is one good snowstorm to tighten up supplies again.
Yes, anything can happen through the end of this year and into early 2015. I just wouldn't be too quick to say they'll be negative. Caution? Of course. That goes for any stock. No need to stampede the herd though, is there???
One more thing. It amazes me how many people want to point at the price of gasoline, but don't talk ethanol vs corn prices. Ethanol consumes a very large percentage of corn production. If demand tapers for ethanol, so will demand for corn. No matter how you slice it, there's lot of it out there. Right now high ethanol export demand has helped keep the price of corn up. It demand tapers, corn is going to drop. Remember, before the export demand kicked in, the market gurus were talking sub-$3 corn. $3.00 corn supports a decently healthy $1.00 margin for California ethanol @ $2.10
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