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Kevin Quon  

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  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]

    Maybe the case, but I wrote this article on Thursday before those algorithms would've had any ability to affect what I was looking at and was basing what I wrote on with the data from the after-hours market session. The article was only approved on Friday morning on July 31.

    I know you credit me with not taking the oil industry correlation to SZYM more seriously, but let me reassure you I am more mindful of the direct impact it has than my lack of dwelling on it about it may have suggested.

    Apart from from mere associations from investors like you or me, there is a consistent pull from the institutional owners who model their holdings on the basis of particular indexes. Given that Solazyme is inevitably associated w/ multiple clean energy indexes, one would expect the company to both benefit and be hurt on the relation of how the oil & gas sector trades as these institutional investors adjust their portfolios accordingly with a broad brush.

    Aug 1, 2015. 04:39 PM | 3 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    Hi mikestesla,

    You're going to have to run that one by me again as I had a difficult time understanding what you just wrote. But here's what I believe you're talking about:

    I believe you are referring to the increase of intermediate product base revenue from $2.6 mil to $3.1 mil vs. the decline in algenist from $6.2 mil to $5.2 mil. As we know the margins (excluding the additional SG&A+R&D expenses that would otherwise create a negative margin in the present) are positive but significantly lower for intermediates vs. those for algenist. This could suggest that the cost of product should have increased had some improvements in production costs for intermediates not been made over the past quarter. I agree, and the fact we saw a decline appears to be a positive step in the right direction.

    At the same time, the margin of error and the fact we're dealing with very low production volumes makes this a bit of a moot exercise in my opinion. There are some inevitable factors that could shift the way these values panned out [timing, input costs, customer agreement differences, product mix, etc]. It definitely sounds like something to keep in mind and to watch, but probably isn't something to boast about in an article without more definite numbers to work with. Thanks for bringing it up though.

    It's also worth reminding that these are figures coming out of Peoria/Clinton which could also suggest that both (or at least one) of these facilities are improving their production metrics.

    Aug 1, 2015. 04:13 PM | 2 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]

    Thank you for the supportive reference, I'll attempt to make an update.
    Aug 1, 2015. 02:36 PM | 1 Like Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]

    I concur that non-dilutive financing options are most likely being explored. While investors like you or me often tend to believe that management doesn't care about dilution's effect on shareholders, let's be honest that the one who actually hurts the most are the major shareholders of the company, who at least in this case are the insiders themselves.

    Based on a conversation I had back in December, one key takeaway that I took was the misunderstanding by the market that the company was signaling its intent to be a good steward of the cash it now had for investors sake. While the company could've raised additional capital at the time at significantly less harmful prices, one of the points it was expressing was that it was opting to invoke cash discipline in order to fix itself w/ its existing warchest and that it believed it was able to do so.

    I have full confidence that management is well aware of its current position and standing with investors and is exploring options that would be less dilutive if possible. I know most people already consider dilution as an inevitable possibility, but I wouldn't be so certain. I do believe their is a higher than average degree of likeliness for dilution, however. And I would believe that options like the ones you expressed above are at least being considered.

    Aug 1, 2015. 02:19 PM | 3 Likes Like |Link to Comment
  • 3 Energy Dividend Companies To Buy Now [View article]
    Probably because this list wasn't intended to be comprehensive...? :) I'll have to look into it, thank you for bringing it to my attention.
    Jul 31, 2015. 02:19 AM | 1 Like Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Well I hope so. But that sounds more optimistic than I'm willing to suggest at this point. I guess tomorrow will provide a bit more guidance on progress in any case. :)
    Jul 29, 2015. 11:35 PM | 1 Like Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    You are absolutely right. They've previously asserted that fuel blends are in the range that offer acceptable margins. There also mentioned that they never left fuels. All the same they also acknowledged in the shift that the focus would be much more on higher margin products. While close followers have assumed fuels have become a non-starter, it's actually contrary to what the company's been saying. In all likeliness, they'll continue to have a small fuel presence until they can comfortably stabilize the bottom line to expand into the scale needed to have a much bigger presence.
    Jul 29, 2015. 11:18 PM | 1 Like Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Technically, they never left fuels. They just reduced its influence and have continued to run small trials/deals in order to maintain a track record and to keep their foot in the door while consistently saying it still represents a large part of their long-term future. Previously they acknowledged that they were supplying fuels to one of the largest fleets. I think most people presumed that was aircraft/vessels... but I guess now we know who that is most likely in reference to. It's interesting to point out that SZYM didn't announce this deal, as they've previously asserted that biofuels are not the right focus in the near-term. The NY Times announced it because UPS announced it. While I think it would be nice if SZYM did talk about it tomorrow, I can also imagine a possibility of them skimming over it all the same.
    Jul 29, 2015. 11:13 PM | 3 Likes Like |Link to Comment
  • Flotek Rises On The Growing Success Of Its Energy Chemistry Segment [View article]
    Thank you for the input, colonnar.
    Jul 28, 2015. 10:34 PM | 1 Like Like |Link to Comment
  • Solazyme Provides Base For Higher Income [View article]
    Nice article and a refreshing read. Consolidation should bring over more than $30 mil in assets though, that number seemed a bit low given moema's cost and working capital. Keep up the good work. :)
    Jul 23, 2015. 04:56 PM | 5 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Sorry, bigbob77. I didn't mean any confusion. As Marc stated below, I was alluding to his comment of the price being comparable to a call option. In which if we were to push the example further, having 100 sh of the stock would be like an option that does not expire. We're not talking about the actual options tables in this particular instance. Just another way of looking at things.
    Jul 10, 2015. 01:59 PM | 2 Likes Like |Link to Comment
  • 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.

    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