Gates has been attempting to unload his 21% stake in Pacific Ethanol (Nasdaq: PEIX) since 16 April 2008 but in the past month has been able to sell only 1.7m of his 10.5m shares in painfully small deals, often below 1,000 shares at a time and bottoming out at just 11 shares in one trade. So far, Gates' investment firm Cascade Investment has posted a USD 7.9m loss on the 1.7m shares it has been able to sell, based on the USD 8 per share price it originally paid for the stock. Pacific's stock has declined steadily since May 2007 due to liquidity problems and questions regarding its status as a going concern.

On 13 May 2008, the company said it would miss its first quarter results filing date because a wholly owned subsidiary had only just signed a forbearance agreement with lender Comerica Bank, after failing to fulfill its tangible net worth covenant requirements. This was the second consecutive results filing delayed by forbearance negotiations with lenders for Pacific. In the filing, Pacific said it expected to post a net loss of USD 36.2m, compared to USD 3m Q1 in 2007 despite a near doubling in sales, due to a goodwill impairment and rising corn prices. However, the news seems to have been good enough for investors eager to pour money into US ethanol.

Following Pacific's investor call on 19 May 2008, its stock shot up 52% to USD 4.85. The increase should ease Gates' losses as his average selling price had dipped below USD 3.20 per share in recent trading. Pacific was not the sole beneficiary of the day's ethanol investment frenzy. VeraSun Energy (NYSE: VSE) had reported a gain of USD 7.6m in the first quarter of 2008 due largely to a USD 4.4m gain from its hedging on 13 May 2008 but endured a sluggish week of trading following its results. Only a week later when Pacific's stock shot up, did Vera Sun jump 20% in morning trading. Fellow ethanol developer Aventine Renewable Energy (NYSE: AVR) also enjoyed a 25% boost in stock value, despite having posted a USD 10.8m loss for the first quarter of 2008, compared to a USD 14.9m gain the year before. Pacific finished the day at USD 4.85, up 52% for the day. VeraSun and Aventine closed with respective gains of 18% and 23%.