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Kevin Quon  

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  • Is It Time To Cut Back On The Railroads? [View article]
    I have no thoughts on Keystone. I hear it really isn't too relevant at this point.
    Dec 16, 2014. 10:35 PM | Likes Like |Link to Comment
  • Is It Time To Cut Back On The Railroads? [View article]
    Shale won't be broken. It needs consistent renewal & will continue to innovate. Many individual companies might be hurt, however. I actually doubt that OPEC's really targeting shale as the very concept is a bit absurd and I'm pretty sure they know it. I personally believe they're just trying to shake out the speculators and commit a warning shot across the bow to those who are accelerating the production rate without any regards to the existing supply. OPEC is being portrayed as the bad guy in the media, but in all honesty, its the over ambitious shale companies who are leveraging their bets that are the real bad guys IMO.

    Things will level out eventually, but unfortunately oil has also become a commodity that attracts a lot of investor speculation as well. Expect volatility in the prices for some time IMO, but I wouldn't expect much action from OPEC unless things really get out of hand (ie. like $30/barrel)
    Dec 15, 2014. 10:56 PM | 1 Like Like |Link to Comment
  • Why Investors Should Keep An Eye On Flotek Industries [View article]
    Also FWIW, expect SZYM to eventually compete in d-limonene markets, or at least as an algal-based alternative. It'll likely start off with their solvent line although who's to say if that'll happen anytime soon with the latest strategy shift. A high margin oilfield solution using it might be possible. Still trying to figure out what their trademark "Shalemaster" is going to be.
    Dec 2, 2014. 11:05 PM | 2 Likes Like |Link to Comment
  • Why Investors Should Keep An Eye On Flotek Industries [View article]
    FTK's certainly not cheap and the oil market's clearly unstable now, but FTK is progressing nicely & its been discounted quite unfairly in relation to its forward progress. While I just began to pick up some shares around $18, I wouldn't dare say its a bottom. It definitely has to round out some support first and would suggest others keep on watching until that happens. But given that I personally was willing to pick up shares around $23, I'm not complaining either and I definitely don't mind averaging down. I was really impressed with their acquisition of Florida Chem a few years back. Orange oil is going be a pretty important commodity going forward IMO.

    In the mean time, the race is on for more efficient & more productive wells now. For the same reason why Berkshire wanted Weatherford's fluids business, I think we'll see a greater demand for oilfield chems (especially green fluids) from here out.
    Dec 2, 2014. 10:56 PM | 1 Like Like |Link to Comment
  • Why Investors Should Keep An Eye On Flotek Industries [View article]
    FTK & SZYM both have some interesting tech for green drilling fluids, although they don't necessarily compete since SZYM only has Encapso at this point (expect more) which addresses a unique drilling lubricant niche. FTK has a much wider breadth of products & is largely focused on well stimulation.

    I wouldn't necessarily say FTK bought out ARC Fluids, but they did contract its founder as a consultant and some of his patents/secrets via ARC. I also would not suggest any relationship between FTK and SZYM exists. It's fairly possible, but I would be more inclined to believe it's really a small world out there in the fluid market.
    Dec 2, 2014. 10:50 PM | 2 Likes Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q3 2014 Results - Earnings Call Transcript [View article]
    "Over almost 12 years at Solazyme, we believe that we built a company and a technology that will produce numerous disruptive products that are better for the planet and will ultimately deliver a multi-billion-dollar profitable commercial entity."

    They knew they were going to destroy expectations, but this is the line they stuck with in order to convey the long-term view of what is now unfolding. I think it's a rather bold statement given the expected outcome of the ensuing conversation. I know it's a statement that will fall on deaf ears now whether one shares these expectations or not. It'll be insulting to some and accused as intentionally misleading by others, but it'll eventually come to pass or not in the course of time.

    I doubt MacArthur's words on returning were held with much esteem at the time of his rout as well.
    Nov 11, 2014. 04:37 PM | 3 Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    It's sector association that is carrying down SZYM as well. Take a look at the biofuel companies as well (including ethanol like PEIX/GPRE/etc.). Institutions treat companies in bulk. Add in the high-beta factor that disproportionately adds to the volatility.
    Oct 28, 2014. 08:54 AM | 1 Like Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    I am starting to wonder why he's initiated a hit campaign against SZYM, especially as he simultaneously tries to position himself as a defender of the nascent industry. Whatever the case, I've given up refuting Maxx as he clearly has more time than me and frequently pulls up a soap box on my articles.

    All I will say about this last article is that he's made some assumptions that are not necessarily true in order to make it fit into his negatively skewed view. It's not hard to do, nor is it entirely out of the range of possibility. I would've gone the extra mile & suggest that the company would be bankrupt by 2016 since that is just as a scary & plausible. I would also recommend that he take an accounting course since he applied some practices that wouldn't normally be accepted by most standards.
    Oct 26, 2014. 07:17 PM | 2 Likes Like |Link to Comment
  • Solazyme: It Isn't Easy (Or Profitable) Being Green [View article]
    That's very encouraging to hear. I fully respect the need for privacy and your abidance to the NDA. Thank you for the additional insight, and I wish your company the best in testing out their theory.
    Oct 21, 2014. 10:19 PM | 3 Likes Like |Link to Comment
  • Solazyme: It Isn't Easy (Or Profitable) Being Green [View article]
    ThadJoseph,

    Out of curiosity, what company do you work for and why do you suggest that the company is carving out a "important niche in the market?"
    Oct 20, 2014. 11:00 PM | Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    Its difficult to tell right now with the JV ramping up (and the periodic working capital influx to the JV) and the latest bump in interest expense due to the last financing round. I don't believe it'll be a steady 40 mil going forward as you suggest, but at the same time, it's not a terrible calculation. Low to Mid-30's is probably more likely.

    Much of the costs are skewed upfront while the increasing revenue converts to cash over the coming quarters. The burn should begin to wane over the next half year IMO, but it takes time for the receivables to start coming in.
    Oct 20, 2014. 08:47 AM | 3 Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    Probably. I didn't like the silence during the dive either, and thought management could have handled that better.
    Oct 18, 2014. 06:47 PM | 3 Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    mikestesla,

    To be fully blunt about it, and this might sound bad, but I didn't really give it much credence. The comments there suggested most people saw right through it. But at the same time, I thought it was an easy topic to talk about and that such ridiculous claims should at least have an explanation for those unable to piece the answers together.

    As I wrote about in my prior article, I agree with some of your thoughts and still stand by my assertions there which suggest why szym has been taking a big hit of late.

    A general pullback after such an unexplained bump is also quite common from a technical perspective. Typically the pullback at least attempts to retrace the latest lows before continuing higher, but hey, its not a science.

    -Kevin
    Oct 18, 2014. 06:34 PM | 4 Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    Mike,

    Its easier to be reassured when you realize how difficult it will be for the company to fail at this point. I understand there is always the risk, and I've seen a few failures unfold in my experience on the markets. But its living through these to see how the company's made the right moves even at the cost of short-term pain. This is especially the case having following the biofuel industry for close to a decade. Though few might understand, Solazyme has managed to carefully navigate through some very dangerous white-water rapids over the last decade.

    As a shareholder I know you want more than they're willing to give, and I do too at times. All the while, its very easy to flip the table around and think about what is I would do in their shoes. I know the company's attempted to explain their silence on many occasions, but shareholders dont understand the benefit of closed doors. There are advantages to keeping metrics hidden in order to maintain negotiating power. Same goes w/ not sounding too giddy about one company over another competitor who is also a client that's more important. etc etc.

    I'm sure ecover didn't help much in terms of being more open, but apart from partner protection, there's really just an element of hard truths investors dont help with. If I told you I made 100 tons this quarter would you hold me accoutnable for it even if I knew I'd make 1000 tons next quarter but could not tell you that I would? What if my cost metrics could fall another 50% next quarter and announcing it today would shock investors now, should I be blunt about it or avoid the topic altogether? If I faced contamination on a daily basis but knew that I could overcome it just as frequently should I tell you? If I could stall a panic over a construction woe for another year because I could overcome it in that time frame, should I tell you? If I maintain a track record of silence in order to not have to address distracting issues or set expectations for monthly progress that can severely hurt our future, should I commit to it?

    I'm not saying these are the case, but what if they were?

    If at the end of the decade, I've made a company that is on the path to becoming a fundamental industry giant that has helped improve the world, should I the company be willing to endure a few harsh critics?

    The oil is pumping now when four years ago it was not - progress is underway. I don't have the answers you're looking for, but I've seen my share of train wrecks to personally believe this isn't one of them.

    If on the other hand you see smoke that I do not, do not feel hindered to flee the scene. No flight is ever pain-free, but it could save your life. But whatever smoke you're seeing, I just don't see the same and I like to think I've done my share of the research to get a good sense of what's out there. Will there be better opportunities to get back in at another time? Possibly, there could be. But then we're just talking about a difference in investment time tables and risk tolerance.

    -Kevin
    Oct 18, 2014. 06:04 PM | 7 Likes Like |Link to Comment
  • Refuting A Short-Selling Solazyme Critic [View article]
    Adam,

    The counterpoint is well-taken, and I fully respect your assertion. At the same time, I find it far from being overly bullish to proclaim a disruptive technology for what it is. Let's take a step back from the stock that everyone is mad about and consider what is actually being done here.

    The company has managed to scale up to a commercial level in which it can profitably address multiple very high volume markets with a superior product than what currently exists today. As the EPA noted itself, for thousands of years, civilization has been restricted to approximately 12 natural oils which can be produced economically at scale and in sufficient quantities. Profit-minded interests have also been bold enough to invest billions of dollars over the last few decades into building the techniques and infrastructure needed to use these dozen oils in order to break them down and recombine them and/or transform them into the oils we actually want to use.

    Yet now here is Solazyme with a technology capable to bypass these expensive processes and conduct these operations within the function of a cell itself. The company has increased the productivity of each cell and allowed it to utilize what the world is already very good at making in order to accomplish the task. Above all, it has shown its ability to mimic and introduce new capabilities into these oils with a greater degree of efficacy and in a fraction of the time needed to otherwise accomplish the task by large agroscience companies.

    Even apart from this creative process of making new oils, the platform dramatically improves efficiencies in harvest seasons (52-harvests a year vs 2 harvests per year), reduces transportation and storage costs, improves capital flow (no need to commit capital half a year in advance for a purchase), and introduces greater reliability in product output (ie. weather & yield variations).

    Now even after we consider all of this, investors have not even begun to hear of the bioproducts that are yet to come. The company can improve upon additional base product markets including paper/wood markets. The company can create renewable plastics. It can even improve the markets for foam and polyeurethane. What about the wide world of absorbents/adsorbents? It'll be there too. Animal feed/pet feed? Yet to come.

    All of this is coming about from a single technology platform that has unlocked the ability to design on a genetic scale. And unlike most nanotechnology companies, Solazyme now has the capital and infrastructure and partners needed to make it all happen and happen within a few short years.

    Now it is very easy to look at a balance sheet and presume that this is all that matters. It's easy to look at other companies and consider their failures, but it is absolutely mind blowing to me how people want to clump all of these technologies into the same boat without a basic understanding of their fundamental differences. Algae and yeast and bacteria are VERY different organisms with very different strengths and weaknesses. And with this I say that no other company has impressed me in this field in terms of what is possible and what has been done other than Solazyme. It comes down to having made the right initial choices (whether by luck or foresight and wisdom) from the very beginning, and it very much started with heterotrophic algae that very much wants to make oil and has already developed the internal organism infrastructure to support it.

    I understand that this is a company that investors do not understand or even want to understand. I understand that the bottom line is all that matters and that cash is king. But I also understand that all things considered, Solazyme is very much in the lead and somewhat in a market of their own in regards to what it is doing. I understand how differentiated this company's technology is. I understand how close it is to proving to the market that the toughest challenges have already been conquered.

    So while you see a company with growing losses with an inability to prove that it can be profitable, I see a company that has a very special technology that is in a very advantageous financial position. It has run into setbacks, but none which has jeopardized the overall plan. I believe our timeframes are just different, and I have never asserted that I am talking about this company on a short-term basis as investors are so accustomed to.

    For the ability to significantly influence the markets for oils, food, paper, & plastics alone, I find it very difficult to believe that a $490 million company price tag is justified when the company is now operating within large facilities that have a combined construction value in excess of $500 million and when the company has $280 million in cash on hand. These are the basic building blocks of society that have not improved in a very long time and here is solazyme with a platform to introduce such innovation needed to do it. I find that the market is merely uninformed when it ignores the value of technology in hope of a quick dollar.

    -Kevin

    p.s. please dont take the length of this reply as any way offensive. Also $280 mil can go a long way in the midst of ramping sale volumes which should really heat up in the coming quarters. Will Solazyme have to raise capital before reaching nameplate capacity? I actually don't believe it will unless it decides to expand capacity. Will they be unable to raise that capital when the time comes? No i also don't believe they will, although it may possibly affect shareholders at that point in time if they find it fit to do so. Does this negate whether the company is undervalued now or not? No I don't believe it does, even though I would consider it to be even more undervalued at that point in time if so. I understand if this company isn't for everyone, but for me, the value is in the technology and that is not being accounted for. For investors set on a proven profit-driven mentality with assured income & dividends, I fully support them to ignore this company until it proves to be the case.
    Oct 18, 2014. 05:24 PM | 20 Likes Like |Link to Comment
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