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Roger Knights

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  • Solazyme: Key Takeaways And Insights From The Q1 2014 Results [View article]
    "Expansion of the US locations doesn't make long term sense for a slew of reasons. At their current state SZYM will be best served by expanding its operations and sales on a large scale (meaning new production plants, not mods to existing)."

    OTC, in a Thursday presentation (today), CFO Tyler Painter said that Moema was modular and could be expanded (triple-capacity, I've read elsewhere) easily. He went on to say that Clinton could be significantly expanded too. This was at the 18-minute mark in this audio presentation: http://bit.ly/1uI3iHD

    Building a modular plant at Moema is a good illustration of management's competence and foresight. It cost more, but it will be worth it.
    May 8 09:27 PM | 6 Likes Like |Link to Comment
  • Solazyme: Key Takeaways And Insights From The Q1 2014 Results [View article]
    Here's the takeaway I liked best:

    "Encapso actually has a broad base of potential market applications far beyond the oilfield, of which the drilling fluids market is just the first."
    May 8 12:00 PM | 1 Like Like |Link to Comment
  • Solazyme: Key Takeaways And Insights From The Q1 2014 Results [View article]
    "This stock has gone nowhere for 10 years for a reason (OK it bounces up and down) . . . ."

    Huh? It only went public in 2010 or so, didn't it?
    May 8 10:46 AM | 3 Likes Like |Link to Comment
  • Solazyme: Key Takeaways And Insights From The Q1 2014 Results [View article]
    I suspect the reason for their scattershot development is to get as many product-strains patented before the competition wakes up.
    May 8 10:37 AM | 4 Likes Like |Link to Comment
  • Solazyme: Key Takeaways And Insights From The Q1 2014 Results [View article]
    I suspect Wolfson is trying to avoid encouraging competitors to enter his space--especially Encapso, which might not be hard to duplicate.
    May 8 10:34 AM | Likes Like |Link to Comment
  • The O-Zone: Understanding Oxygen's Role In Making Biobased Companies Rock [View article]
    RWRATTI wrote: "the news and excuse of why the Moema plant was not up and running (power issues with the Co-Gen plant) rang very hollow. . . . What scares me the most is that the plant is in Brazil. One of the world's hardest places to do business. Point in fact, the IOC (Olympic committee) has serious concerns that the construction will be finished for the summer games."

    Those two statements are contradictory. If the intermittency at the cogen plant was due to "mañana" attitudes by workers there about keeping the boilers stoked at all times, then the explanation Wolfson gave was hardly hollow--just discreet.

    With so much money at stake in keeping the power supply steady, and so little extra supervision needed to to ensure it, there shouldn't be a long-term problem there.
    May 6 01:19 PM | 2 Likes Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q1 2014 Results - Earnings Call Transcript [View article]
    PS: I should have included the fact that Algenist didn't need to be low-priced to compete, given its great value proposition. Ditto with Encapso.
    May 6 12:54 PM | 1 Like Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q1 2014 Results - Earnings Call Transcript [View article]
    It may have been a new problem, based on a shift to a new source of power, as Wolfson said at the start, namely:

    --------
    "However, our facility has been experiencing, intermitting power and steam availability resulting from the start-up of a new cogen facility at the adjoining Moema sugar mill.

    "This intermittency was unexpected and while we don’t see reliable availability of power steam as a long-term issue. We’ve not yet been able to complete production of our first commercial product. It’s a big disappointment, not to be able to report from our first commercial product for Moema today. We were really hoping to do that right up to the wire."
    -------

    Even if the intermittency existed on April 1, Solazyme may have thought, "It's just a mouse nibbling at a wire and we'll track him down in a week or two."
    May 6 12:50 PM | Likes Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q1 2014 Results - Earnings Call Transcript [View article]
    Innov8r wrote:
    "At the end of the day, QC failures could be routed into the Encapso market. And, they didn't spend a bunch to develop this product since it is just the cells they already have."

    I don't think that's the case, or drillers could buy micro algae leftovers from any algae-focused firm. And, IIRC, Solazyme said that it had devoted years to developing a special strain of algae for the oil drilling market. Wolfson also said, about 40% of the way thru his lead-in presentation, "In fact, Encapso actually has a broad base of potential market applications far beyond the oilfield, of which the drilling fluids market is just the first."

    Innov8r wrote: "this product competes against heavily entrenched products from E&P and oilfield service leaders (and the trend is to recycle mud to reduce overall costs). In order to be successful in the E&P space, Solazyme will need to offer significantly lower costs, and they'll need a partner. Unlike all Solazyme's other products, Encapso doesn't have a partner. I suspect they are finding that partnering terms aren't all that favorable for biotech products in the oil space."

    Algenist went up against lots of entrenched firms in the cosmetics field without a partner and is doing well. Wolfson pointed out that Encapso is now in use in 20 oiilfields, up from a dozen a month or so ago, and that he is getting second orders from the initial buyers. Of course Solazyme can't sell and service this thing alone, but it can easily make deals directly with small oilfield exploration and production firms like Arc and Anchor, as it has already, or with free-lance consultants. It's probably got orders for more than it can make. It may have raised the cash with the intent to build a plant dedicated to Encapso.

    As for favorable terms, Encapso's value proposition is so great that it can charge enough to get over 50% margins. If Halliburton doesn't like Solazyme's terms, it can go sit on a pickle.
    May 6 12:45 PM | 2 Likes Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q1 2014 Results - Earnings Call Transcript [View article]
    PS: Here's a new-today SA article by Jim Lane on the industry-wide switch from biofuels to renewable chemicals.
    http://seekingalpha.co...
    May 6 09:41 AM | Likes Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q1 2014 Results - Earnings Call Transcript [View article]
    Attention SA editors: Why are there always TWO copies of the transcript in these threads?? Quit with the double-posting, please!
    May 6 06:05 AM | Likes Like |Link to Comment
  • Solazyme's (SZYM) CEO Jonathan Wolfson on Q1 2014 Results - Earnings Call Transcript [View article]
    I've liked your comments over the years, MKW, but this one is way off base.

    "I just was hearing about the military getting lambasted for overpaying massively for fuel from SZYM when they are cutting back necessary programs."

    "Just"? That happened long ago. And the overpayment was misrepresented in the media. The navy had funded the research to produce the fuel, and that one-time cost was included in the per-gallon cost. The production cost for more would have been lower.

    "Although they may make money on specialty oils, it can't begin to make up for their bloated overhead."

    Actually, the company runs a lean ship. Your "bloated overhead" is a mere inference (a wrong one) from the high per-gallon price the navy paid.

    "It's either mass produce gasoline/oil products in mass or not. Their focus away from that is not a good signal."

    Wrong--it's a sign of prescience. And it's not recent. The company decided to shift its focus away from biofuels years ago, because they are higher-margin products.

    "Even worse is their target to try to help the oil industry in drilling and fracking by making oil lubricants. If oil is the future why are they even in existence."

    Because they are not a biofuel company any more. They do make "premium cut" fuel additives. Hitachi recently reported great results with it, and this CC reported that it has signed a contract to supply such an additive to a customer (unspecified who).

    "Last, their capital raise indicates they have no intention of being profitable anytime soon, . . ."

    OTC, it indicates that demand for their products is so strong that they need to build a new plant to make it. Belgian detergent-maker Ecover let the cat out of the bag a week or so ago when it said that the oil from Solazyme that it is switching to to replace palm oil will be produced in Europe in three years.

    ". . . dilutes equity holders, . . ."

    Not if it's an accretive (adds-value) dilution.

    ". . . and will make it harder to raise money in the future if they blow it all and still can't be cash flow positive."

    The company is in the process of successfully exiting the "valley of death"--the transition period between being a low-capital development company and a high-capital production company. It is finally "getting traction" and is on the verge of breaking out--that should be clear to anyone who's been following it closely.

    Of course it isn't making money YET. But it hasn't blown anything. It's been investing in developing a patent portfolio covering a wide range of products--which is a very smart move, to get a good lead on the competition. And it's been hiring people to handle the new products, customers, and production facilities it's acquiring.

    Apparently many traders are similarly out-of-touch with the company's strategy and tactics--hence the high short interest. So much the better for us longs--they've knocked the pps down to bargain levels, and provided an accelerant that will kick in as the pps rises.
    May 6 06:02 AM | 14 Likes Like |Link to Comment
  • Solazyme Advances Its Agenda On Multiple Fronts [View article]
    "Alright Solazyme bulls, anyone getting worried about Moema delay yet?"

    I think there might be a permitting delay. I sold half my May calls Friday and bought Sept. calls.
    May 5 04:58 AM | Likes Like |Link to Comment
  • Solazyme Advances Its Agenda On Multiple Fronts [View article]
    "The only thing that SZYM has me a little worried about is that it is engaged on so many product fronts . . . ."

    The reason it's doing that -- I presume -- is to maximize its patent portfolio before the competition wakes up.
    May 5 04:55 AM | 1 Like Like |Link to Comment
  • Solazyme Advances Its Agenda On Multiple Fronts [View article]
    I think I've read posts explaining that a palm oil substitute from Solazyme that had to compete with palm oil on a price basis would be a low-margin product for Solazyme. But the environmentalists' push for an alternative to palm oil may mean that Solazyme will be able to ask for a higher price. The soap company would benefit even if it had to pay more, because it would be able to advertise its soap as palm-oil free--increasing its share of the market.
    May 1 12:11 PM | 2 Likes Like |Link to Comment
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