Diablo 3 Delays Damage Activision Blizzard In More Than 1 Way [View article]
While I appreciate the great amount of loyalty the gaming fan base has for its products, and stand humbled by the amount of derogatory comments aimed at me personally, I would like to emphasize that the main point of this article was centered around the reputation of this leading gaming company.
I am fully aware of the vast gap between social gaming and the in-depth virtual world experience found in computer games. Nevertheless, there is something to be said about the hidden damages that occur in faulty and rushed products. Maybe its the person who decides to wait a week before buying during the launch of the next big game in expectation of another delay, or maybe its the person who decides to skip out on the game altogether... whatever the case, smooth product releases can be important factors.
The fact that the product was not even fully completed is another story in itself. D3's auction house had its real world economy delayed, and the PVP wasn't even included into the final product. I personally know a person who decided to skip out on D3 having had a wonderful time during E3 and got frustrated at the way the release was handled.
All said, I'll accept that this article may have incited more feelings than it was initially meant to do, and if that's the case I apologize. Nevertheless, social gaming is becoming ever more a threat in the battle for user time. The more there is out there to divert one's attention, the less value computer gaming ultimately has.
Lol, as for those who assert I'm not a gamer. Sadly, I admit I am. Its only been a few short days since D3's release, and in between my regular job, writing articles, having a social life, I've somehow managed to get a few characters past level 15 and support a lvl 34 wiz at the moment. I'll probably be giving it less time though. Got better things to do thankfully. I think D3 is fun, but it's a beautified copy of D2. Very nice game overall though. I guess the company's thought is "why mess w/ success?"
The Solar Industry Will See Consolidation, Not Regression [View article]
Monopolies only really exist in this world where the ability to create & innovate doesn't. While there's a lot of strong-arming right now for positioning coming from China & the US, I severely doubt that any country and its economy/government will ever fully monopolize the solar industry. Even if existing companies disappear, there's always the possibility of another unknown company popping up down the road.
Optimizing Value In The Pursuit Of Dividend Yield Income: REITs, MLPs And BDCs [View article]
CWH has actually refinanced its debt quite nicely, and even if it were to cut its dividend to a more reasonable level, in all likeliness the yield would still be higher than most REIT's are currently paying out. As one of the older REIT's out there (well into the 1980's under HRPT), I'd say its a bit premature to write them off just that easily. Just my two cents.
Investors Begin To Differentiate Solazyme's Unique Technology [View article]
I've been in your shoes. I really have. But then I did a lot more research into what was coming out. Undoubtedly, there are a lot of failures still circulating out there, but I must tell you you're barking up the wrong tree if you think this is going to be one of them. Wish you the best.
Solazyme Provides An Alternative To The Oilseed Industry [View article]
"ultimately competes with the acreage for growing food"
On the contrary, I would've hoped my article shows that it can be quite the opposite. This process can make use of acreage significantly more efficiently in some instances. If two similar products can be made with one utilizing significantly less resources, a free market economy will allow for the efficiency to eventually naturalize itself out. We're talking about many, many years (perhaps even decades) before NEEDING to have cellulosics & other sugar sources. Re-purposing of the land will just equate to more sugarcane/beet/corn etc production & less soy production (for example) & greater yielding outputs altogether.
Solazyme Provides An Alternative To The Oilseed Industry [View article]
There's a lot going on here. But from a pure production expense standpoint, it would appear we're looking at $466/acre for sugar & $408/acre for soy. But there's plenty of more factors to consider.
Either way, the primary concern I was attempting to address was the concept of indirect land use that biofuels is often criticized for. By using this process society may actually benefit from making much more efficient use of arable land. What might get even more interesting is when you start comparing the resources farmed on very niche areas of land.... ie coconuts.
Rising Cocoa Bean Prices Find An Unlikely Hero In Algae [View article]
Innov8r,
Sorry, I don't have the energy to go into detail about what you wrote. But to keep things short:
1) They're evolving, so do you mean 2 years ago, today, or 2 years from now? If you actually ask for today, you really don't seem to care about knowing what will be reflective of their normalized operations. The company's also provided a nice graphic of how these costs have come down in the S-1 you dismissed along with the $3.44/gallon cost region they believe they can produce at in a fit-for-purpose commercial facility based on 2011 predictions when sugar was priced higher. 2) They have product revenues & product COGS - but they don't distinguish whats included. You need to be more specific as the company covers a wide spectrum of product. 3) Not all the oil has not been part of R&D projects, some were for commercial purposes. Also, no they didn't, nor would that be representative of what's to be expected. 4) The project cost $26/gallon, not the fuel itself - it included research revenues. You might also want to consider this: http://bit.ly/WESxCu 5) Somewhere between 0.3 to 0.4 is the magic # you need. You can do the math. 6) I'm not aware of too many other sugar-to-oil platforms. There are other sugar-to-specific chemical compound platforms however. You just need to look at the conversion efficiencies to do the math on those - although that probably doesn't help much unless you incorporate the worth of those compounds compared to oils. 7) Yes, they can. You also make an errant assumption that they will only have fixed prices. Read up on Dow/Solazyme 8) Some of it can be found in the patents. 9) Some of it is, yes.
I just wanted to add that your barrage of questions was a little over the top on the skepticism. If you want to dismiss the hypotheticals outright, you sure don't leave a lot of room for discussion, or for that matter, a different point of view away from your belief that the company can't succeed.
If you are only satisfied with current profitability, I would suggest you stay away from this company until it proves to become profitable on the income statement. Also, I don't want this to be read the wrong way, as I'm honestly saying all of this with the best of intentions out of respect to your inquiry. Addressing these issues are quite time consuming however, and much of this information can be found yourself with some great effort.
Rising Cocoa Bean Prices Find An Unlikely Hero In Algae [View article]
@ Burt Rothberg:
I believe anytime an industry has its major input cost rise over 300% within a decade as seen in the chart above, there's reason to be concerned going forward. The same goes for experiencing 20% price volatilities year-over-year.
This article wasn't to suggest that chocolate was doomed or that the price increases couldn't be absorbed. It was merely to point out the inefficiency of the logistics system supporting it.
Solazyme's Management Presents at Morgan Stanley Technology, Media & Telecom Conference (Transcript) [View article]
Glad to see Seeking Alpha is providing transcripts for conference presentations like these now. Still a rough translation at times & full of mistakes, but it's much appreciated.
Partners Embrace Win-Win Proposition In Solazyme's Tailored Oils [View article]
Adam Aloisi,
I agree with you that the lack of clarity on various metrics provides haziness as to the pricing of the company stock in the present. However, I am a strong supporter of the idea that until proven otherwise the company's information should also be taken at face value. The company has provided various figures that allow us to piece together a decent picture of market potential. There are many here who would be quick to discredit this as being reliable, and yet they have no reason apart from their doubts as to state why. There are many here who also disagree with me on this principle of trusting what management has been saying and are going to be quick to attack whatever I say here, so bear with me.
When we look at SZYM, the inherent value of the company's future isn't even being realized at all. One simple test of this would be the fact that the company now carries a higher book value on its balance sheet than at its IPO & has made significantly more progress than at its IPO and yet now trades at less than half the price of the IPO. One can argue that the IPO itself may have been overvalued, but the fact the initial momentum actually carried the stock 50% higher over $18 to $27, and it's clear that market demand had a much stronger appetite upon the potential than the IPO price.
I believe that the traditional metrics of analyzing a stock fall short in development companies, especially those in the promising biotech space. One look at more promising pharma companies like ARNA & VVUS give a credence to this. Clearly if we were to use the conventional metrics for ARNA, a price-to-sales ratio of 63 and price-to-book ratio of 15 is far from warranted. But the reason such a price is here is due to the market's realization of the value inherent in the company's future regardless of the possible setbacks that could come about. I'm not arguing for a valuation that high, otherwise we'd be looking at a price of $70 for SZYM on book value alone.
Yet if we stick strictly to the numbers as your post might suggest, we lose sight of what is actually to be valued in an investment. The $44 million fails to remain representative of the company's future revenues. Only $16 million were actual product revenues, and the majority of this was related to the company's own efforts to penetrate a market from scratch. Not so going forward. Practically none of the revenues were related to actual business model that is to soon be expected.
Yet we do have some clarity as to what those revenues can look like, and we have some clarity as to what those margins could look like. We know what nameplate capacity is able to produce. We know the range of ASP's the company is aiming for. We have an approximate range of the company's cost structure. We have a defined pathway for market entry.
Simple math alone suggests that within 24-36 months, revenues attributable to the combined company could reaching levels north of $500 mil/yr alone if an ASP of $3000/mt across the board is applied and existing facilities under development are maxed out. Even before considering the reality of additional facilities, the revenue growth ramp justifies a higher multiple.
To be clear, Adam I understand your point and would never suggest for anyone to lose sight of their own portfolio diversification just as I myself maintain. It is never wise for anyone to put more than 5-10% of their portfolio into a particular equity. In the same sense it is ideal to see this investment as being speculative as it stands as a company in development without a firm grasp as to metrics which can be relied upon.
As to what I believe the stock price should be valued at, I think its safe to say that the IPO price is still my short-term target floor just on the basis of the simple test of market expectation potential stated above. I honestly believe that no one has a clear concept of valuation at this point (which you could justify as meriting a lower share price if you discredit the progress thus far proven). The analysts themselves still have PT's all over the board due to the lack of clarity as you mention even though the majority each agree with the much higher price target.
I'm sure those wanting to level me out will weigh in with their input after this. No problem on jumping the gun, newalker j/k (thanks for apology & no offense taken). Replying to comments have taken a real toll on me in terms of time, so forgive me if I don't put the amount of effort in that I used to in addressing those looking for a rebuttal.
I'm going respond in a less-winded fashion: "This is why they're sticking to blends that merit higher prices." Don't pretend like you actually believe that they'll just be making a straight-forward 100% jet fuel replacement, bioprocess engineer Chatsko.
Diablo 3 Delays Damage Activision Blizzard In More Than 1 Way [View article]
I am fully aware of the vast gap between social gaming and the in-depth virtual world experience found in computer games. Nevertheless, there is something to be said about the hidden damages that occur in faulty and rushed products. Maybe its the person who decides to wait a week before buying during the launch of the next big game in expectation of another delay, or maybe its the person who decides to skip out on the game altogether... whatever the case, smooth product releases can be important factors.
The fact that the product was not even fully completed is another story in itself. D3's auction house had its real world economy delayed, and the PVP wasn't even included into the final product. I personally know a person who decided to skip out on D3 having had a wonderful time during E3 and got frustrated at the way the release was handled.
All said, I'll accept that this article may have incited more feelings than it was initially meant to do, and if that's the case I apologize. Nevertheless, social gaming is becoming ever more a threat in the battle for user time. The more there is out there to divert one's attention, the less value computer gaming ultimately has.
Lol, as for those who assert I'm not a gamer. Sadly, I admit I am. Its only been a few short days since D3's release, and in between my regular job, writing articles, having a social life, I've somehow managed to get a few characters past level 15 and support a lvl 34 wiz at the moment. I'll probably be giving it less time though. Got better things to do thankfully. I think D3 is fun, but it's a beautified copy of D2. Very nice game overall though. I guess the company's thought is "why mess w/ success?"
The Solar Industry Will See Consolidation, Not Regression [View article]
Optimizing Value In The Pursuit Of Dividend Yield Income: REITs, MLPs And BDCs [View article]
Investors Begin To Differentiate Solazyme's Unique Technology [View article]
Investors Begin To Differentiate Solazyme's Unique Technology [View article]
Solazyme Provides An Alternative To The Oilseed Industry [View article]
On the contrary, I would've hoped my article shows that it can be quite the opposite. This process can make use of acreage significantly more efficiently in some instances. If two similar products can be made with one utilizing significantly less resources, a free market economy will allow for the efficiency to eventually naturalize itself out. We're talking about many, many years (perhaps even decades) before NEEDING to have cellulosics & other sugar sources. Re-purposing of the land will just equate to more sugarcane/beet/corn etc production & less soy production (for example) & greater yielding outputs altogether.
Solazyme Provides An Alternative To The Oilseed Industry [View article]
Either way, the primary concern I was attempting to address was the concept of indirect land use that biofuels is often criticized for. By using this process society may actually benefit from making much more efficient use of arable land. What might get even more interesting is when you start comparing the resources farmed on very niche areas of land.... ie coconuts.
Solazyme Becomes Part Of AkzoNobel's 'Future-Proof Supply Chain' [View article]
5 Holdings I'm Buying Now As The Market Falters [View article]
Rising Cocoa Bean Prices Find An Unlikely Hero In Algae [View article]
Sorry, I don't have the energy to go into detail about what you wrote. But to keep things short:
1) They're evolving, so do you mean 2 years ago, today, or 2 years from now? If you actually ask for today, you really don't seem to care about knowing what will be reflective of their normalized operations. The company's also provided a nice graphic of how these costs have come down in the S-1 you dismissed along with the $3.44/gallon cost region they believe they can produce at in a fit-for-purpose commercial facility based on 2011 predictions when sugar was priced higher.
2) They have product revenues & product COGS - but they don't distinguish whats included. You need to be more specific as the company covers a wide spectrum of product.
3) Not all the oil has not been part of R&D projects, some were for commercial purposes. Also, no they didn't, nor would that be representative of what's to be expected.
4) The project cost $26/gallon, not the fuel itself - it included research revenues. You might also want to consider this: http://bit.ly/WESxCu
5) Somewhere between 0.3 to 0.4 is the magic # you need. You can do the math.
6) I'm not aware of too many other sugar-to-oil platforms. There are other sugar-to-specific chemical compound platforms however. You just need to look at the conversion efficiencies to do the math on those - although that probably doesn't help much unless you incorporate the worth of those compounds compared to oils.
7) Yes, they can. You also make an errant assumption that they will only have fixed prices. Read up on Dow/Solazyme
8) Some of it can be found in the patents.
9) Some of it is, yes.
I just wanted to add that your barrage of questions was a little over the top on the skepticism. If you want to dismiss the hypotheticals outright, you sure don't leave a lot of room for discussion, or for that matter, a different point of view away from your belief that the company can't succeed.
If you are only satisfied with current profitability, I would suggest you stay away from this company until it proves to become profitable on the income statement. Also, I don't want this to be read the wrong way, as I'm honestly saying all of this with the best of intentions out of respect to your inquiry. Addressing these issues are quite time consuming however, and much of this information can be found yourself with some great effort.
Rising Cocoa Bean Prices Find An Unlikely Hero In Algae [View article]
I believe anytime an industry has its major input cost rise over 300% within a decade as seen in the chart above, there's reason to be concerned going forward. The same goes for experiencing 20% price volatilities year-over-year.
This article wasn't to suggest that chocolate was doomed or that the price increases couldn't be absorbed. It was merely to point out the inefficiency of the logistics system supporting it.
Solazyme's Management Presents at Morgan Stanley Technology, Media & Telecom Conference (Transcript) [View article]
Partners Embrace Win-Win Proposition In Solazyme's Tailored Oils [View article]
I agree with you that the lack of clarity on various metrics provides haziness as to the pricing of the company stock in the present. However, I am a strong supporter of the idea that until proven otherwise the company's information should also be taken at face value. The company has provided various figures that allow us to piece together a decent picture of market potential. There are many here who would be quick to discredit this as being reliable, and yet they have no reason apart from their doubts as to state why. There are many here who also disagree with me on this principle of trusting what management has been saying and are going to be quick to attack whatever I say here, so bear with me.
When we look at SZYM, the inherent value of the company's future isn't even being realized at all. One simple test of this would be the fact that the company now carries a higher book value on its balance sheet than at its IPO & has made significantly more progress than at its IPO and yet now trades at less than half the price of the IPO. One can argue that the IPO itself may have been overvalued, but the fact the initial momentum actually carried the stock 50% higher over $18 to $27, and it's clear that market demand had a much stronger appetite upon the potential than the IPO price.
I believe that the traditional metrics of analyzing a stock fall short in development companies, especially those in the promising biotech space. One look at more promising pharma companies like ARNA & VVUS give a credence to this. Clearly if we were to use the conventional metrics for ARNA, a price-to-sales ratio of 63 and price-to-book ratio of 15 is far from warranted. But the reason such a price is here is due to the market's realization of the value inherent in the company's future regardless of the possible setbacks that could come about. I'm not arguing for a valuation that high, otherwise we'd be looking at a price of $70 for SZYM on book value alone.
Yet if we stick strictly to the numbers as your post might suggest, we lose sight of what is actually to be valued in an investment. The $44 million fails to remain representative of the company's future revenues. Only $16 million were actual product revenues, and the majority of this was related to the company's own efforts to penetrate a market from scratch. Not so going forward. Practically none of the revenues were related to actual business model that is to soon be expected.
Yet we do have some clarity as to what those revenues can look like, and we have some clarity as to what those margins could look like. We know what nameplate capacity is able to produce. We know the range of ASP's the company is aiming for. We have an approximate range of the company's cost structure. We have a defined pathway for market entry.
Simple math alone suggests that within 24-36 months, revenues attributable to the combined company could reaching levels north of $500 mil/yr alone if an ASP of $3000/mt across the board is applied and existing facilities under development are maxed out. Even before considering the reality of additional facilities, the revenue growth ramp justifies a higher multiple.
To be clear, Adam I understand your point and would never suggest for anyone to lose sight of their own portfolio diversification just as I myself maintain. It is never wise for anyone to put more than 5-10% of their portfolio into a particular equity. In the same sense it is ideal to see this investment as being speculative as it stands as a company in development without a firm grasp as to metrics which can be relied upon.
As to what I believe the stock price should be valued at, I think its safe to say that the IPO price is still my short-term target floor just on the basis of the simple test of market expectation potential stated above. I honestly believe that no one has a clear concept of valuation at this point (which you could justify as meriting a lower share price if you discredit the progress thus far proven). The analysts themselves still have PT's all over the board due to the lack of clarity as you mention even though the majority each agree with the much higher price target.
I'm sure those wanting to level me out will weigh in with their input after this. No problem on jumping the gun, newalker j/k (thanks for apology & no offense taken). Replying to comments have taken a real toll on me in terms of time, so forgive me if I don't put the amount of effort in that I used to in addressing those looking for a rebuttal.
Kevin
Rising Jet Fuel Costs Leave Airlines Looking For Answers [View article]
Rising Jet Fuel Costs Leave Airlines Looking For Answers [View article]