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Kevin Quon

 
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  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    Well summarized
    Sep 30 10:23 PM | 1 Like Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    txpe2003,

    Fair value will always be a subjective matter, but considering the revenue growth expected from two new large facilities and the defined channels of long-term growth ahead, I would imagine they should be at least worth the amount of capital that has been put into the company thus far (that's approximately $935 million when you consider the retained losses + capital surplus to date, even though this neglects the leveraged value of additional partnership capital).

    There's really 3 approaches to measuring value: Income, Comparable businesses, and Cost.

    -Income remains hazy given the lack of defined costs/ASPs/margins/tim...
    -Comparable businesses is misleading given the lack of real comparisons (no co's out there making tailored designer oils), and when coupling in the tech/funding setbacks to the supposed peer groups (ie. AMRS/GEVO)

    Therefore the cost approach makes the most valid case in my opinion (at least for now).

    But how can anyone expect for the market to follow suit with my opinion. Until the income approach becomes more clear, the haze of market whim remains the model to follow.

    -Kevin
    Sep 30 10:19 PM | Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    Rwratti,

    As txpe2003 noted, it depends on how I tagged it. The proterro article was a Bunge-focus article with a subtag of SZYM. In almost all my prior articles, I tagged SZYM as the focus. The reason I did not for that article was because SZYM was never explicitly mentioned in the agreement and would not have been able to get it past my editors otherwise.

    -Kevin
    Sep 29 09:59 PM | 1 Like Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    Just an FYI going forward, but it's Proterro not Proterra. Proterra deals with electric battery busses.
    Sep 28 10:51 PM | 1 Like Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    Frankly, no. Prices at the pump would still go up. The markets are way too large for SZYM to address them as a whole. Even if Proterro became some large multi-billion company that expanded out across the globe, there would still not be enough fuel produced by SZYM to replace our current fuel usage. Of course even if this were to happen it'd be several decades away.

    But again this is why fuels remains an attractive market to be in. A ubiquitous market with low barriers to entry that appears to have growing margins going forward.

    Sadly, our world is vastly underestimating how unprepared we are to make the switch to renewable energy sources.
    Sep 27 05:50 PM | 2 Likes Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    The patents might have some information about that, but when I broadly scanned through them most of it just referenced "nutrients" in the general sense. The company did appear to leave the door open as to some other things it might need to use as well. Here's one such phrase:

    "A solid cultivation support of a photobioreactor can be inoculated with a photosynthetic microorganism, along with addition of moisture and other components including, but not limited to, nutrients, salts, buffers, metals, nitrogen, phosphate, sulfur, etc. "

    In any case, I believe "nutrients" aren't meant to be a significant component - at least not to the point where one worries that such nutrients become too costly for reasonable operation.
    Sep 27 01:41 PM | 1 Like Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    Thanks, I appreciate it. I also agree with you about the transition now underway.
    Sep 27 01:37 PM | 1 Like Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    I think it would be best to separate the company's performance from Wall Street's view of their own money in the company's performance.

    The company is performing just fine, and their outlook IMO is as strong as ever. They ran into 2 hiccups - Roquette & the Moema delay, but have otherwise delivered as promised & introduced a number business broadening product lines. From what I see in the patent applications, there will be even more to come.

    I am not so bullish on Wall Steet. Investors have become a mob of traders believing they are still investing. I blame the Internet for democratizing this mob-mentality and opening up the already non-informed user base with low-commission trading. The fact Alibaba can become the largest IPO even if Jack Ma controls it all, the fact that Tesla can be a $30 billion company even though its gambling its future on a battery plant, and the idea that an action camera company like GoPro is somehow justified at $10 billion are all signs of these times. Traders don't understand the fundamental (nor do they care) of a good business nor do they care. They want to make money now and fast, and they'll starve a few companies of their financial lifelines along the way to doing so.

    So if you ask me what I think is the greatest risk to SZYM right now? Honestly, I think its the weak investor who doesn't know what he's holding onto. I don't doubt that SZYM will prefer to raise capital in the future to build out more plants. I do believe their current plants could sustain a build out but that it would be more ideal to raise funds in order to accomplish this more quickly.

    But I also believe that momentum will begin to fortify over the next year and that current investors will feel more confident. I also believe that larger funds will begin to pick up on SZYM given the momentum already underway for cleantech companies. This past week was a large signal that more investment demand is going to be driven down the path of cleantech. GS already positioned itself (and SZYM as an example) for the new investment period in cleantech. Others will follow as they divest from "dirty" fossil fuel companies.

    Internally, I see few risks for SZYM at this point. Tech's proven, plants made, relationships founded, production ramping. The largest risk is probably a partnership failure for one of its base-customers (ie. bunge, unilever, azko). But even with this, I see the long-term future of the co still intact. Apart from that, squeezed margins & additional delays are always possibilities.

    Externally, the largest risk might be a growing debate from those who want to destroy the company's plans. Paid activists looking to yell fire in a crowded theater are more than willing to derail progress if it would satisfy their tunnel vision ideologies. Given Ecover's size and customer base it was easy to blow that one out of proportion, but larger companies that understand whats really going on in the world might not be so easily troubled by such rabble-rousers. Even still, I believe Ecover hasn't been chased away even if its been put on the defensive.
    Sep 26 03:23 PM | 13 Likes Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    Sorry, I'm not sure what you mean.
    Sep 26 02:28 PM | Likes Like |Link to Comment
  • Did Bunge And Solazyme Just Enter A New Age Of Sugar Production? [View article]
    David,

    The company has been silent on many of its relationships, and while I do not know why or even agree sometimes, I know they believe there's an advantage to this. If you've been following for the past few years, management has previously stated publicly that it intends to periodically update investors but doesn't want to be a company tracked from PR to PR. The fact some of these ties are still able to be dug up should be reason enough to believe progress continues to develop behind the scenes.

    As for this particular relationship between to Proterro & Solazyme, I would even go as far as to say it doesn't exist yet. While I personally believe Proterro and several other companies have opened relations with SZYM and probably even tested their technologies together, there might not be a formal relationship yet. Even if there was, I would not expect the company to publicly announce it until it was at an advanced enough stage to be irreversible. If I really had to guess, I wouldn't expect any next-gen sugar news for a couple years even. Just my thoughts on the matter.

    Kevin
    Sep 26 02:24 PM | 5 Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    Their current inability to gain organic certification would appear to be the case. However, I was very intentional when writing this to not assert that SZYM's algal flour was organic as the possibility was real but never really clear to me. In any case, the underlying trend is natural & healthy, even if organic embodies this idea.

    SZYM appears to have appealed to the NOSB in order to spur on a greater discussion about fermentation-based products:

    http://bit.ly/1n5lNFx


    I don't think they'll be walking past this organic idea anytime soon. But for now they likely have no intention of releasing the CBI that prohibited it from being included.
    Sep 25 10:08 PM | 1 Like Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    RWRATTI,

    I believe the company thought it was worth a fair shot (without expecting it to pass) to try for the certification based on the given information. Either that, or they were presumptuous in their thought of what would qualify.

    I rather not speculate as to what institutional investors will do. There is a lot going on right now in the cleantech space, pushing for both directions. In any case, I believe they'll be (and have been) taking signals from the market as a whole right now.

    -Kevin
    Sep 23 12:46 AM | 1 Like Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    txpe2003,

    Thank you for the link. It was quite useful. I was quite surprised actually that Solazyme would be attempting for an "organic" certification as I only believed their products would be considered "natural". What is disappointing to me is the rationale as to why the product was rejected:

    "Both the original petition dated September 6, 2013 and the supplemental dated January 21, 2014 contained a tremendous amount of information that was redacted because it was considered to be Confidential Business Information (CBI). This afforded the Subcommittee no opportunity to make a determination on the material or to complete its responsibility of looking at ancillary substances for the newly petitioned material."

    This leaves the door open for an appeal, but it might not be in the best interest of the company to pursue it further. Who's to say if they'll even qualify if so. Either way, its interesting to see the checklist the subcommittee uses for its determination.

    -Kevin
    Sep 20 11:48 AM | Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    I echo sddd's thoughts on the matter.
    Sep 19 12:17 PM | Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    Take a look at fellow peers in the industry and you'll see that the Glassdoor is hardly the place to gather data in order to justify current fears. It's a site for people to yell into the wind and complain over their frustrations.
    Sep 18 10:17 PM | 1 Like Like |Link to Comment
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