One Small Step For Amyris

Exciting stories are usually built with a lot of boring announcements. To that end, Amyris's (Nasdaq:AMRS) recent announcement that it had finalized a joint venture with Brazil's Cosan (NYSE:CZZ) is not surprising or exciting, but it is a good example of the blocking-and-tackling type of announcements that will go into making the Amyris story and business model work over time. 

A Deal That Works For Both Sides
Amyris and Cosan will work together to produce and sell various so-called base oils that will be made with the farnesene that Amyris will produce in other facilities. It is a pretty typical win-win type of deal. Amyris needs to find as many customers as possible for its farnesene, while Cosan needs diversification away from ethanol as an end product of Brazil's prodigious sugarcane production. (For more, see Brazilian Stocks To Watch In 2011.)

Just One Brick In The Road
Ultimately, the success of this Amyris-Cosan venture in base oils is not critical to the overall success of Amyris, but it highlights what I think is an important part of the Amyris business model - working with other companies and finding as many potential markets for its products as possible. Where many failed ethanol companies like VeraSun and Aventine went wrong was in being just another commodity producer, but one that relied upon other commodity feedstocks (corn, notably) and government subsidies. In other words, they were refiners with pretty much one product to offer.

In contrast, Amyris has found a lot of potential uses for its genetically-modified yeast. The first key product will be farnesene, which can be used in a wide range of products including diesel and jet fuel additives, lubricants, detergents and flavors and fragrances. As time goes on, and the company's yields improve, it may be possible to produce a much wider range of products including fuels themselves, plastics and synthetic rubber. (For more, see Back To The Future With Ethanol.)  

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FinancialEdge: The Biggest IPO Flops

Ever since the credit crunch and Great Recession KO'ed the IPO market, it has been difficult for companies to raise money and go public. Perhaps the successful (and over-subscribed) IPO of General Motors (NYSE:GM) can mark the turn in the tide. Then again, a successful IPO is no guarantee of a long run as a successful company or stock; the IPO frenzy of the 1990s, for instance, created a great deal of excitement and small fortunes for nimble traders, but also left a lot of wreckage. (To learn more, see our IPO Basics Tutorial.)

Nobody knows whether General Motors will fare better on its second trip around the track. In the meantime, here is a look at some memorable IPOs that failed, flopped or otherwise flamed out.

CIT Group - The Biggest of the Bunch
CIT Group (NYSE:CIT) has a history stretching back to 1908 and has boasted of having done business with about 80% of the Fortune 1000. That did not prevent the company from running itself into trouble in late 1999, and management had to scramble to find emergency credit facilities. Eventually the company sold itself to Tyco in 2001, and Tyco then spun the company out in an IPO in July that raised $4.6 billion 2002. The credit crisis walloped the company, though, and the company ultimately needed over $2 billion in TARP bailout money - a bailout that ultimately went for naught as the company declared bankruptcy in November of 2009. All that said, the company is still here; CIT emerged quickly from pre-packaged bankruptcy and trades on the NYSE once again with over $8 billion in market cap. However, bad memories for those who held the stock into the bankruptcy persist.

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