Pacific Ethanol (PEIX) is down 28% this morning on good news. The company has new plant open. But it’s stock fell. What’s going on?

Wait, that can’t be right, but I guess it is. Pacific Ethanol (NASDAQ:PEIX) fell 28% in the first moments of trading, with nothing but good news on the reports.

PEIX spiked to $2.08 late yesterday (pretty close to 4:30 p.m.), but the stock fell to $1.80 at open. And it’s currently around $1.63. That’s 28% down from Monday’s ebullient close.

The company’s Port of Stockton plant just came online, which means Pacific Ethanol will be making another 60 million gallons of ethanol in the next year, bringing total production for Pacific Ethanol up to 220 million gallons per year.

This should have been good news, enough to send the stock up significantly, and it did, if you look beyond yesterday’s overly jubilant closing price. Monday’s open price was only $1.36, meaning the stock has gained a nice 20%, despite the depression of the overall markets.

The reaction today wasn’t a statement about ethanol producers. Although investors are starting to question the profits available to alternative energy producers in a recession, but that can’t explain a pop this high. Pacific Ethanol’s spiking was simply an excited correction in an extremely volatile market.

Source: Pacific Ethanol (PEIX) Down 28% in First Hour