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Kevin Quon

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  • Amyris Advances, But At What Cost? [View article]
    Hi Jim,

    A few thoughts to consider:
    - I'm aware of the conversions, but that also suggests that they're producing for about $3850 - $4200/MT.
    - AMRS basically has one facility that is slightly bigger than Clinton. The next facility will take several years to be built and much more capital is needed to do so.
    - AMRS is running very cash flow negative, and while the company says they'll be cash flow positive in 2014, it'll take a lot of production to really turn that cash outflow around. I suspect they'll be needing to dilute quite a bit to get the next facilities up... or they can dig the hole deeper with more debt obligations.
    - AMRS also produces single molecules rather than complex oils. It's a lot less flexible than SZYM as well. SZYM can even sell some of its tailored oils without additional refining. AMRS can't say the same for the majority of its markets. That means more costs.
    - AMRS is targeting very niche markets, while SZYM is able to do the same but has the ability to target much broader markets. AMRS is already 18% tapped out of its high margin squalene market - how much more of the market can it really have? Especially when the run rate is already so low prior to ramping?
    - AMRS already has a failure in scaling on their record. They're currently running in much smaller tanks than SZYM (I believe 200k-L, which suggets they still have a tech risk scaling higher) Will their next facilities carry larger tanks?
    - ramping? SZYM has stated a much shorter time frame than AMRS and it appears to be able to do it much faster based on results to date. (hence why they're both reaching nameplate around the same time even though AMRS opened up a year before).
    - Engineering yeast, which was well understood, was the low-hanging fruit for industrial biotech. Heterotrophic algae has yet to be fully explored, so its limitations in terms of robustness & capabilties are still a bit unknown (ie. higher ceiling of possibility). Also suggests competitive advantage for SZYM compared to future competition. Additionally, SZYM will have a signficiant IP advantage as a result due to the lack of peers in the heterotrophic algae space.
    - Last of all, AMRS is just overpriced now due its balance sheet. The company is taking on way too much debt in order to stay alive rather than being bought out. I really hope they can raise some more equity. Total is practically stealing the company away from mainstream investors.

    All said, don't get me wrong. I actually am rooting for AMRS, but as an investment it isn't something that I want to get behind right now. The company has a long way to go. SZYM is in much better shape, and its quality of partners is much better. If you really want to do the math of product being sold, consider Algenist. How much per MT do you think that's going for? I can assure you its much higher than what AMRS is getting from their highest-margin product of squalene...

    The point to all of this is that its not just a matter of margins. Market size & opportunity matter. So do financials. In almost every respect, SZYM is winning. But I wish the best for both.

    Kevin
    Mar 1 07:29 PM | 1 Like Like |Link to Comment
  • Why Intermolecular Is Starting To Look Oversold [View article]
    Packur,

    I'm not an insider. The company seems fine fiscally. Obviously the news of SanDisk and Toshiba was not anticipated. That's all there is to it right now. I see no reason why profitability isn't on the agenda moving forward. Just my two cents.

    Kevin
    Feb 28 09:58 PM | 2 Likes Like |Link to Comment
  • Why Solazyme Rose After Its 2013 Year-End Results [View article]
    Ike,

    I'm always defending against misinformation, like that coming from you. I've told you numerous times that you just want to argue. Now it seems like you're doing it on principle alone without understanding. Continue believing and saying what you will. It's pretty sad when you don't understand how the financials break down or what's included in them. For everyone who thinks he knows what he's talking about, I got one word to refute everything he just said here: Algenist.

    Take the soap box, Ike.

    Kevin
    Feb 28 10:02 AM | 3 Likes Like |Link to Comment
  • Why Solazyme Rose After Its 2013 Year-End Results [View article]
    I rather not waste my time on deaf ears.

    Cost of product sold?
    - I've basically laid it out in my past articles. Go find it.

    Pricing strategy?
    - Listen to the latest conference call.

    Distinguish between R&D & product revenue?
    - Look at the earnings release, its already broken down.

    -------------------
    Also, do you not understand how this works?

    Let's use your logic:
    - Your metric ton is 7x to 8x "55-gal drums".
    - My metric ton is also 770x to 880x "1/2 gallon" bottles.

    Here are the prices of the website you referenced (http://bit.ly/1fueBYk):
    55-gallon drum = $819.92
    1/2 gallon bottle = $16.07

    Your metric ton = $5739.44 to $6559.36
    My metric ton = $12,373.90 to $14141.60

    Wholesale pricing gets cheaper in larger quantities, Ike. You may want to sell in 55-gallon drums, but I might want to sell in 1/2-gallon bottles. But some outsider can't just come in & say that the product goes for $14,000/MT. That's not accurate.... and neither is your suggested price based on the arbitrary amount you decided to use.

    Additionally, you referred us to a wholesaler... not a commodity producer. Your wholesaler buys products from manufacturers. There is a mark-up due to the difference in trade levels. This is not an apples to apples comparison by any means. Do you get it now?
    Feb 28 12:08 AM | 4 Likes Like |Link to Comment
  • Why Solazyme Rose After Its 2013 Year-End Results [View article]
    Ike,

    Did you really just refer us to a wholesaler selling product on the 55 - gallon and 16 - oz scale? Perhaps you didn't notice the trend as the price per lb. cost dropped from $4.32 to $1.86. This is the kind of nonsense straight out of your book. Do you really expect wholesale pricing to stop at 55 - gallons when we are selling in metric tons?

    Why do you try so hard? Even in your errant argument you are complaining about a 300 dollar differential. Perhaps you can tell us the price that this supplier (whom you referenced) paid in acquiring these goods. You are not even comparing apples to apples in terms of trade level.

    Kevin
    Feb 27 05:16 PM | 8 Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    For what it's worth, management never said Moema was Q1 to begin with. People just assumed that's what "early 2014" meant. Either way, clearly there was one focus today - ASP's.
    Feb 26 05:26 PM | 2 Likes Like |Link to Comment
  • Why Solazyme's Pathway For Growth Is Beginning To Clear Up [View article]
    Maxx,

    You may private message me like I requested and stated in the beginning or you can keep this up in public like you wanted. It's entirely up to you. You keep trying to show some kind of "professional" face by saying you'll talk to me privately, but you have yet to do so. I have made no effort to contact you, but you seem very interested in trying to show your point of view to everyone publicly. The personal message inbox has always been open if you want to talk, but you didn't want to use it last time. If you want this soap box, keep standing on it. But why would you expect me to email you when it was only you who had something to say to begin with? I'm only here to reply.

    Kevin
    Feb 24 08:42 AM | 2 Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    The risk of doing business in Brazil is indeed high. That is a fact. Bunge has been very successful there, however, and that is a bit comforting.
    Feb 23 11:39 PM | Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    tgar13,

    I'm sure your kids must dislike your policy =) But bravo for you and your family! I hope that in whatever I write, your investments are first and foremost based on the conclusions of your own due diligence. I believe there are no sure things on the stock market, and that no one should invest more than they are willing to lose through speculation.

    That said, I'm more than looking forward to the various opportunities that appear to be on the horizon through SZYM's tech. I can assure you that there food products taste wonderfully familiar, if not better in some instances. In my 2 visits, I've tried the algal flour itself along with salad dressings, cookies, cakes, breads, ice creams, chocolate milk, and protein bar. It amazes me that much healthier alternatives that carry a rich flavor are right around the corner.

    As for the sugar demand, there is comfort in knowing the SZYM has made arrangements in some of their deals which help to mitigate the potential rise in sugar prices. As long sugars and oils continue to rise and fall together, I'm not concerned about sugar prices that much. To date, it actually appears to be improving.

    Oils have fallen, but sugars have also come down. The existing surplus in sugars and India's willingness to start exporting if prices rise suggests that sugars are likely to stay low. Yet oils now appear ready to rise. Apart from the rising price of crude oil, palm and coconut oils have been creeping up due to a variety of factors (typhoon haiyun + brazilian drought affecting soy). I am a little concerned about that drought in Brazil, but thus far it appears to only be affecting the North. The redundancy of having the Iowa facility is reassuring when it comes to making product flow reliably.

    -Kevin
    Feb 23 07:57 PM | 1 Like Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    JeremySpoken,

    My apologies if that was the key takeaway of this article. I probably used very poor examples. My intention in writing this was to show that a long-term health trend is now underway which could reduce the growth rate in sugar consumption over time. I was not trying to be solely focused on the introduction of stevia-based alternatives or Coca Cola Life. Accelerated demand for beverages and processed foods can often lead to volatility in the sugar markets. I wanted to provide the context that such demand appears to be waning rather than growing, and that this can have an effect on a very specific industry which prefers to see stable sugar prices.

    Kevin
    Feb 23 07:40 PM | 2 Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    Nice pun & I fully agree, RWRATTI. The global sentiment behind sugar has evolved into one of growing caution. Here's a widely publicized & very recent study that suggests that sugar consumption may double the risk of heart disease. http://bloom.bg/1hfwrTv

    Sugar in processed foods and drinks were specifically targeted.

    Such growing awareness can have a potential ramification on ingredient consumption. I fully believe that processed foods will begin to take measures like the beverage industry has.
    Feb 23 07:33 PM | Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    Thank you, Stephen. I'll be listening as well.
    Feb 23 07:25 PM | 1 Like Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    I fully agree, RyanJoe555. The intention of this article was just to provide additional big-picture thinking as to whats going on around the world and how that could be applicable to a company like SZYM. I won't speculate as to when exactly Moema is going to be announced, but I believe the long-term picture remains very much intact regardless.
    Feb 23 07:22 PM | 2 Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    I appreciate it, Marc.
    Feb 23 07:20 PM | Likes Like |Link to Comment
  • Can Changes To The Beverage Industry Affect Solazyme? [View article]
    I fully agree, betchewiwin. Sugars are just a means to an end for both industries, neither actually want to use sugar apart from the properties it carries. If a healthier alternative can be discovered, bravo!
    Feb 23 07:19 PM | Likes Like |Link to Comment
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