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Kevin Quon  

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  • Details Emerge For Solazyme's Potential Co-Products [View article]
    A nimble algae company seems a bit of an oxymoron. :)

    I know its tough for most observers to wonder why algae is taking so long since the stuff seems to grow so easily in the pool. But the struggle is much less one of cell growth than it is of increasing oil volume, maintaining growth while condensing volumes, and finding ways to cost effectively extract.

    Heterotrophic algae has a benefit of having more filled water balloons which help in popping them. It also has the benefit of more stable growth conditions and one that directly feeds the lazy algae rather than having them waste time trying to convert sunlight into energy. Yet the price tag is hefty, and the equipment needed to be at a commercial scale is not cheap.

    But the sun is sexy, and most start-up companies go in with the daydream of utilizing a "free" resource.... until halfway in they realize that it's not free after all. I remember reading one of Jim Lane's articles (i can't find it now) about Aemetis and how it wanted to partner with an algae co (though it did not stated who, i'm guessing it was joule or algenol). The sun-based company needed nat gas in order to cool down its system from overheating on really hot days... that's a cost. Unable to produce at night? That's an opportunity cost. Even Heliae can only produce very tiny amounts of oil despite using a mixotrophic algae which everyone thought would be the best of both worlds. The point is that algae is not easy because its hard to get a lot of oil out of it and it's even harder to sustain that production.

    But heterotrophic algae works now. As you noted, even Alltech appears to be thriving, and they are because they're well financed. Alltech does a lot more than just algae, and they definitely aren't pursuing the markets (outside of animal nutrition) we are because its not their business.

    Heterotrophic algae requires a significant amount of upfront capital. But don't worry about some small company overcoming us any time soon. The financing window has basically been shut down since 2011. Solazyme squeezed through and crossed the valley of death years ago. Now it has an operation and the necessary steel in the ground to make things happen. Is capital tight? Sure, but a bank is much more willing to invest in a company with a profitable product line than one that hasn't even proven its tech (let alone have large facilities to work in). Solazyme will have access to capital.

    I would not be worried about small algae companies. Not in the slightest for the next half decade and possibly beyond. The market closed down the industry and algae companies just do not evolve fast enough to become anywhere close to where Solazyme is today without having to go through an even rougher time than what Solazyme has already gone through.

    That said, I really do wish them the best. I am a full proponent of the industry and wish the world would snap out of it that this is a viable industry that wants to explode but needs capital and time to do so. The ironic and very sad thing to me is how closely related this really is to medical biotechnology in terms of development time and reward... and yet the investment community just doesn't have that example to point to yet in order to realize it. In the mean time, the window of opportunity remains closed for all those small and promising companies that are out there....

    I really hope they survive.

    -Kevin
    Jul 10, 2015. 01:22 PM | 6 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    $3 call option. Well said. Might I also add that it is one that doesn't expire.
    Jul 10, 2015. 12:49 PM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Thanks, Rwratti. Will keep in mind. Also their operation is smaller than Clinton and slightly bigger than Peoria.
    Jul 8, 2015. 03:27 PM | Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    "I am sure Kevin will not mind if you post one last comment with your PT on SZYM by end of 2015..."

    Thanks, mikestesla. But I really don't care. As I wrote in a comment above, this is an investment to be evaluated over a 10-year period of time. Just my personal opinion though.
    Jul 3, 2015. 02:02 PM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Bye.
    Jul 3, 2015. 01:54 PM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    "====This is my last comment here until Solazyme proves (true) production costs can or cannot be lowered. See you gentlemen when Solazyme ramps production.

    Maxx Chatsko"

    ----------------------

    I'm going to hold you on that one. Let's see if you can be a man of your word.
    Jul 3, 2015. 01:52 PM | 4 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Maxx,

    Since you believe you stated it, what are these fixed costs that are going to come down? Because I didn't get that impression when you were trying to warn us about something.
    Jul 3, 2015. 01:49 PM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Indeed, Mike.

    Oh, and just in case the scary part was the supposed fixed cost. Even that will partially decrease unlike what Maxx suggested above.
    Jul 3, 2015. 01:35 PM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    There's a production cost, a temporary cost, and a fixed cost. We knew that.

    Can you repeat the scary part again? Because a fixed cost of $3.6 million doesn't seem dangerous, and technically should be separated from the cost of production when you're evaluating the performance of the process. Especially at Moema.
    Jul 3, 2015. 12:58 PM | 3 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Hi Dave,

    Algawise is being marketed by Bunge North America.
    http://bit.ly/1gdugnA

    It's still very early in terms of introducing the brand commercially. However these oils are also geared for large purchase orders (for businesses and what not). I'm sure they'll have a product for consumers in due time but we're not there yet - so I don't know if you can obtain any. Oil sales should increase over the back half of this year.

    Kevin
    Jul 2, 2015. 06:31 PM | 5 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    KonaBlend,

    Proterro's been staying relatively silent as is to be expected from most small private companies. There has never been a direct or publicly stated relationship with Solazyme either, although there are many reasons to believe that the company will be working with Solazyme in the future as my last article on the subject tried to point out. From what I'm aware of, Solazyme has at least done trial work with almost a dozen next gen sugar companies in the past. I'm also under the belief that Proterro in particular was advised to look towards 1st gen biofuel producers in the near term rather than pursuing companies like Solazyme. Don't read into that, it's just sound business advice.

    I would not be looking at Proterro like it's going to change anything over the next 2-3 years. I think within half a decade we'll begin to see increased work with these next gen sugar companies. They're very much an intermediate-term goal. While Proterro for instance is modular and capable of quickly scaling up, recall that things are still very early for this co as well.

    -Kevin
    Jul 1, 2015. 10:52 PM | 3 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    abigchocoholic,

    There's a difference between a reality check and falsified claims.

    -------------------------
    It takes 1 minute for Maxx to say this:

    "Riddle me this. If Solazyme realized production costs of ~$6,100 per MT in 3Q14 for its Intermediates & Ingredients portfolio, then how will it become profitable any time soon with limited and non-optimized production capacity?"

    It takes me more than an hour to reply to him showing that he just made up his own facts and held me accoutable to them: http://tinyurl.com/p9b...

    And then it took you another minute to say the following:
    "Really Kevin, All that could have been summed up by saying "Come on Max, it might not be all that bad. You might not be 100% right, you might be only 60% right. And it might turn around in the future.""
    ----------------------

    So that's what I'm doing. I'm following your advice. I will not reply to his false claims and I'm dismissing them without addressing them. People can believe what they want. I'm not going to waste my time on them anymore and if you want a contrary opinion to them, ask someone else. That's all I'm saying in my disclaimer.

    If you now want a researched and strong contrary opinion to his claims, I'm sorry. I think you just already convinced me the first time to wipe my hands clean of him. So let me just walk away rather than suggesting I'm doing something wrong. In the future, a shorter disclaimer will remain and what you guys make of what he says is up to you. I'm joining your side as a spectator that gets to make 1 minute comments instead.

    Kevin
    Jun 27, 2015. 01:25 PM | 5 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    1) It's in most of the filings. Here's a quick snipped from the 2014 10-k: "Through the end of 2013, cost of product revenue consisted primarily of third-party contractor costs associated with packaging,
    distribution and production of Algenist® products, including internal labor, shipping, supplies and other overhead costs associated with
    production of Alguronic Acid®, a microalgae-based active ingredient, and Microalgae Oil used in our Algenist® product line."

    3) No i don't. Alguronic Acid is a bit of a special instance because so little of it is needed to be made and the majority of the expenditures are in the other materials/packaging required to make the final product. For particular high valued ingredients is probably possible to do the same model (recall that alguronic acid can fetch >$1 mil per MT).
    Jun 27, 2015. 12:53 PM | 4 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    V123, primary market offset.
    Jun 26, 2015. 09:41 PM | 1 Like Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Appreciate it, Mike. But I feel obliged to let people be aware that I am not stonewalling him for merely having a dissenting opinion. People can both appreciate and hate his quality of writing elsewhere. I just want to make sure they understand it's the person I'm ignoring because of the way he is here. For those that like his writing, I have no problem giving him further credibility by redirecting them to his articles.
    Jun 26, 2015. 05:16 PM | 6 Likes Like |Link to Comment
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