‘Gates Factor’ Helps Avista Hit 20-Year High

Avista Corp. shares soared Thursday to their highest level in at least 20 years after investors learned Microsoft Corp. Chairman Bill Gates has indirectly become a major stockholder at the 111-year-old utility.

The stock (ticker symbol: AVA) raced $7.50 to $32.13 after Cascade Investment, an investment vehicle for the billionaire Gates, disclosed in a regulatory filing that it held 5% of the utility’s common shares.

Word of the Gates investment was just the latest boost for Avista: It recently got a plug from Merrill Lynch and said it might sell stock in its online-billing and fuel-cell businesses.

The Spokane, Wash., company’s shares have doubled in the last 10 days, partly from enthusiasm for fuel-cell stocks.

Microsoft’s investing Web site helped touch off a mania for the sector recently when it touted Plug Power Inc. (PLUG), saying that stock could rise 10,000% by 2010.

Thursday, Plug Power surged $7.25 to $85. Other fuel-cell stocks rallied as well: Ballard Power (BLDP) rose $13.25 to $71.75 and Fuelcell Energy (FCL) zipped $12.50 to $50.

Though some analysts waxed bullish on Avista’s prospects--it’s “got a great fuel-cell story--hang on for the ride,” said Deutsche Banc Alex. Brown’s Edward Tirello--others issued caveats.

For one, Cascade’s investments are chosen by a manager on Gates’ behalf; at least one investor wondered whether the billionaire even knew he held Avista shares prior to Thursday’s Securities and Exchange Commission filing. And analysts said investors could be disappointed if the sector fails to meet ever-loftier expectations.