Future Fuel has a rise of 13% over the same time period. Both share prices are being driven by investors' positive response to the recent news out of Washington D.C., as per the sources.
December 19, 2019. By Hemant Arora
The share price of Renewable Energy Group has gained 40% over the last two days. Also, Future Fuel has a rise of 13% over the same time period. Both share prices are being driven by investors' positive response to the recent news out of Washington D.C., as per the sources.
The news was published that the officials from the U.S. House of Representatives and Senate who are negotiating the terms of a new spending bill that would prevent a federal government shutdown at the end of the year had agreed to include a retroactive extension of the BTC in the legislation. The share price of Renewable Energy Group gained 10% in response.
Accordingly, the spending bill was released and language reinstating and extending the BTC was included within that version. The declaration that the spending bill would reinstate the BTC sparked the rally by the share prices of Renewable Energy Group and FutureFuel was trading highly. The specific language in the legislation explains why those rallies continued to increase throughout the day.
Renewable Energy Group's quarterly tradition of showing what its earnings would have been since 2017 had the BTC not expired makes it easy for investors to quickly determine how much of a benefit the retroactive reinstatement of the credit will have if the spending bill is passed.
FutureFuel has derived a smaller benefit from the BTC than has its larger peer due to the decreased scale of its biomass-based diesel production operations. Also, the company has not reported the impact that the BTC would have had on its earnings but for its expiration. In 2017, however, FutureFuel recorded a $28.9 million benefit to its pre-tax income from the BTC, which provides investors with a guidepost for the credit's subsequent impact to the company.