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Kevin Quon

 
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  • 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 | 2 Likes 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 | 2 Likes 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 | 14 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 | 2 Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    I don't know if you're actually looking for an answer from me, but do bear in mind that the expenses for scaling up are skewed heavily on the front half. Historically the co has been capital efficient and analysts exuberant. I think you put too much weight on the analysts expectations though. But otherwise I agree with you.
    Sep 18 11:16 AM | 1 Like Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    AbleBaker,

    For these first few plants there have been measures taken to lock in a portion of the margins and de risk margin volatility. The company is largely finding baseload partners for now. Some of these agreements have reduced margin risk through feedstock dependent pricing.

    Now how the market will actually react to swings in commodity prices in anticipation of a stronger correlation to the reality is another q altogether. Investors are far from rational at times.

    Kevin
    Sep 17 06:31 PM | 2 Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    If anyone invested too early, it's Fiddler. But I don't exactly hear him second guessing himself. To each their own. Despite the I-told-you-so's from those who would contest they knew better all along, no one knows how the market would have reacted along the journey thus far. But it's become clear that the company's gotten the short end of the stick in terms of market understanding/excitement. Despite the fact now is the most exciting time for the company and for investors, Wall Street is holding their noses. We still have many months to go, and maybe a hiccup along the way. My positions only grown (granted with some hedged protection), and you won't see me selling anytime soon to say the least.
    Sep 16 10:10 PM | 4 Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    The company expects to sell the majority of its products (of which it has many in non-food applications) for $2000+/MT. AlgaVia flour/protein has a target price range between $6000/MT - $12,000+/MT.

    Operating margins expected to be around 20%-25% across the company's #'s.

    The rest of the math is a subjective take on how much revenue is brought in via product mix.
    Sep 15 11:29 PM | Likes Like |Link to Comment
  • Solazyme: Taking Advantage Of Healthy Food Trends And The Need For Innovation [View article]
    1) The capacity is being addressed, and the sampling can easily lead to upstream capacity agreements with willing parties as well.
    2) What makes you think that using SZYM's ingredients will increase the current price? In several instances, reduced costs compared to current ingredient pricing was cited (although hard if not impossible to find those references now). Logistics savings is a big part of the savings as well. Not having to source some ingredients months in advance (aka, a lot of warehouse space for storage) can be one big advantage.
    Sep 15 11:26 PM | 2 Likes Like |Link to Comment
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