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Pacific Ethanol, Inc. (NASDAQ: PEIX) delayed the filing of their annual report with the SEC. Also, Pacific Ethanol announced that the closing of the sale of 5,250,000 shares of the Company’s Series A Cumulative Redeemable Convertible Preferred Stock for $84 million to Cascade Investment, L.L.C. will not occur today. Cascade investment, which is Bill Gates own Private equity firm, had an agreement in place with Pacific Ethanol to close the deal by March 31st, 2006. Furthermore, the company also announced that it continues to work to finalize documentation relating to approximately $34 million of debt financing to be provided by Hudson United Capital and Comerica Bank. With about $118 Million in financing uncertain, the question is how can Pacific Ethanol screw this up?

There was no reason provided for the delay which makes it even worse. I personally think that Bill Gates could care less about his $84 Million investment in Pacific Ethanol. Bill Gates has gotten a lot of positive publicity for investing in a technology and a company that could limit American dependence on foreign oil. For Bill Gates its more a question of reputation than money. If Cascade Investments finds any red flags or any thing questionable with the company and or the management team I don’t think they will go forward with the deal. I really don’t think Cascade would want to associate the Bill Gates name to a company unless everything checks out fine. I realize that Cascade has tripled their investment and would be crazy not to go ahead with the deal but we are again talking about Bill Gates.

All in all Pacific Ethanol somehow managed to screw up when it had everything going for them. This company would be no where near what it is without Bill Gates investment and the publicity that came with it. I am also taking Pacific Ethanol, Inc. (NASDAQ: PEIX) off my ?I recommend? list. If everything check out in the next few weeks I might put it back in there since I like their business model and target market of California.

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