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  • Solazyme Closes Clinton And Deepens Ties With Bunge [View article]
    One way of looking at this is:

    1. In manufacturing:
    traded diversification for cost reduction.

    2. In distribution (of food-related products):
    traded diversification and gross income for net cost reduction.

    3. In technology ownership:
    avoided any dilution (SZYM will receive from JV both royalties and tech maintenance fee).

    Since dilution of technology would be irreversible (and harmful to existing shareholders' upside), the above strategic choice appears to be commendable, although it obviously suggests less short-term optimism on sales and cash flow than many investors had hoped for at previous higher share price entry points.

    One line in the concall transcript stood out to me: "we recently achieved our first European sales for both whole algae protein and whole algae flour to customers in the bakery category, where we hope to discuss more on this front in the near future." In other words: 'Whatever Roquette is doing, it is not deterring customers in its backyard from purchasing from SZYM'.

    This leads me to wonder, building on Steve Rasher's "feeling that there is more to the story", whether there might be a Roquette angle involved in the Bunge deal. For example, if Roquette had abandoned all demands other than some face-saving avoidance of immediate transparency of its compensatory transfers to SZYM, then it is possible to imagine that Bunge's structure and operations would provide various opportunities to satisfy this demand. What kinds of transfers? Besides cash, there were Roquette patent applications, and perhaps equipment and even personnel, which SZYM might have wanted to secure, and which Roquette might have preferred to transfer to Bunge.

    In any event, I agree with Abigchocoholic that food has the highest long-term value, and I am pleased that it is being prioritized by SZYM.

    Meanwhile, downstream partner Unilever has had a lot on its plate, some of which is relevant not only to SZYM but to Bunge:

    "Unilever ... on July 1 officially began operating baking, cooking, and spreads as a standalone unit, ... “We changed our R.&D. organization to increase its effectiveness by embedding it within the categories,” he said. “This has allowed each category to allocate resources across discover, design, and deploy to meet their specific needs."... “We’re also increasingly leveraging our partnership with external research bodies and key suppliers. These now drive 70% of our open innovations."

    Back in December when this "internal spin off" was announced, one comment was: "Bunge is often touted as another possible industry suitor, with analysts pointing out the company has indicated it would like to add more value-added assets to its core commodity operations. However, some in the City point to the fact the US agribusiness giant is in the middle of reviewing its options over its under-pressure sugar business in Brazil. The company, analysts say, would need to sell that asset first before embarking on major M&A like an acquisition of Unilever's global spreads arm."

    One thing's for certain: Bunge has many incentives to maximize the JV's consumption of, and adding of value to, sugar from Bunge's existing Brazilian sugar assets. By giving Bunge additional incentives farther downstream, the JV expansion seems to align Bunge's incentives with SZYM's very closely.
    Nov 3, 2015. 10:30 AM | 8 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    except that Goldman Sachs and all its clients know this company well, and will pile in very fast once the perceive (which will be faster than small investors can perceive) a boomeranging of the risk-reward ratio over their investing time frame.

    There is much talk of quarterly fund manager accounting, but presumably if Goldman Sachs comes to the view that SZYM's revenue breakout is likely within a 12-month (or at least same fiscal year) period, than all the negative stock price feedback loops will swing instantly into positive stock price feedback loops.
    Aug 3, 2015. 09:40 AM | 2 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    This is an important source of reassurance, as just the most visible and retail-oriented portion of SZYM's business that could be sold off if operating capital ran low, and other ways to replenish it were unreasonably expensive:

    "Algenist ... offload ... to another major in order to cut down on expenses & focus entirely on it's other important divisions? For sure, and no doubt the company knows this to be an option. But for them to not have done so yet speaks much more about their confidence in their ability to turn things around."
    Aug 3, 2015. 09:27 AM | Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    Somebody's going to make a lot of money, and the world will benefit, from SZYM's technology in the long run, but that leaves open the question of whether that somebody included existing shareholders.

    Diversified exposure vs. averaging down by buying more at current levels: If you think (as I do) that the company has many alternative ways to avoid falling into the kind of financing distress that results in punitive financing costs, then current prices look very attractive.
    Aug 1, 2015. 09:52 AM | 5 Likes Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    Kevin, your comment as follows seems central to the risk of current shareholders being heavily diluted at lower share prices than their acquisition cost:

    "achieving access to capital given
    its strong partnership base and
    its growing list of sales commitments, which the company should be able to finance"

    Do you have a view on the possibility of factoring the claim against Roquette (if it is not soon court-confirmed, order and collected) for purposes of quickly injecting cash into SZYM, even if only to strengthen its bargaining power in other financing and customer relationships?

    If I were UPS or Mondelez, I would be willing to pay non-trivial amounts for exclusive rights in certain markets and/or time periods. Since in actuality I am a long-term and somewhat long-suffering shareholder, I hope all non-dilutitive options are being actively explored and compared.

    Those options seem numerous enough to insulate SZYM from pressure to accept any distress-type financing terms, for some quarters to come, but of course they will want to avoid the pressure that would result from getting without a quarter or two of projected exhaustion of operating capital.
    Aug 1, 2015. 09:21 AM | 1 Like Like |Link to Comment
  • Solazyme Fixes Moema's Inconsistency But Misses Q2 2015 Expectations [View article]
    The following promotional description from MDLZ-Enjoy Life, is of the kind of product that pressures competitors to "catch up":

    "certified gluten-free, free from the 8 most common food allergens (wheat, dairy, egg, peanut, tree nut, soy, fish and shellfish), verified non-GMO, and certified kosher & halal ... 5g of protein per serving"

    That's a lot of protein. "per serving" is usually a much smaller portion than most consumers would assume, since it tends to describe things they are avoiding like calories, carbohydrates, fats, sugar and salt.
    Aug 1, 2015. 08:55 AM | 5 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    For me as well, a longterm reason to invest in SZYM is that competing products like palm oil and dairy both contribute to, and are vulnerable to being disrupted by, climate change.

    Of course this sort of top-down reasoning does not ensure that investment in a particular new technology or company will be profitable, which is where SZYM's breadth of industries and cooperative relationships with big players came in to give me confidence.

    That remains my investment thesis, although sales, orders and production capability have all been disappointing, and the market's view of stock value has been terrifying -- more so the longer it continues.

    Amidst all the criticism of Wolfson, it seems clear at this stage that, every time he caused the company to raise cash, even when it felt at the time like excessive dilution of existing shareholders, we now have reason to thank him that the company is not forced to raise cash at today's stock price.
    Jul 23, 2015. 08:59 AM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]
    There will be nothing left to do but celebrate when SZYM creates a form of algae that creates (without solvents or processing) hash oil,

    which is discussed in this article:

    As to how to imbibe celebratorily, I think I'll stick to beer, but my beer buzz will be mellower if the triumph of SZYM's "unprocessed and pure" hash oil reduces my exposure to secondhand smoke from marijuana.
    Jul 6, 2015. 08:26 AM | Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]

    From the perspective of evaluating impacts of macro trends on SZYM’s risk profile, it seems to me that SZYM’s riskiness is reduced, by potential diversification that verges on a type of hedge, through selling to cattle-raisers, and selling to fossil fuel drillers, as follows:

    Both cattle-raisers and fossil fuel drillers face sustainability questions, notably from their impact on human health and on climate change and fresh water supplies (with cattle-raising further being part of a feedback loop in which it is disrupted by tightening fresh water supplies and other consequences of climate change).

    This is a major reason why SZYM’s technology appears attractive. Another reason is the potential for SZYM’s technology to reduce transportation costs and related energy consumption (by locating production alongside customer facilities – which is impossible for either cattle-raising or fossil fuel drilling).

    But the above suggests that SZYM’s sales and/or margins would be reduced by stronger-than-expected competition from fossil fuel drillers and/or cattle-raisers in markets for downstream products.

    Accordingly, SZYM’s ability to sell to fossil fuel drillers and cattle-raisers serves to hedge SZYM’s sales and margins against such competition, and thereby to reduce SZYM’s overall risk profile.
    Jun 27, 2015. 02:41 AM | 2 Likes Like |Link to Comment
  • Details Emerge For Solazyme's Potential Co-Products [View article]

    Re: your comment: <<A very, very small batch of algae used to make alguronic acid at Peoria to support Algenist. The rest is handled via 3rd party manufacturers.>>, especially <<handled via 3rd party manufacturers>>

    1. This is news to me (has this information been publicly available)?

    2. This is great news, because contracting and/or licensing the manufacturing process to other manufacturers has the attraction of being independent of most SZYM capital, costs and cash, thereby (a) enabling extremely fast growth on upside, and (b) providing a cushion against death-thru-cash-burn on the downside.

    3. Is any information available, or do you have a view, on progress towards the ability of other SZYM products to be made by contracted and/or licensed manufacturers? (Presumably the relatively small batches that are sufficient for commercial sale of alguronic acid makes this a relatively easy product to manufacture).

    Thanks and regards,
    Jun 27, 2015. 12:09 AM | 1 Like Like |Link to Comment
  • Solazyme Begins To Sell Algae Oils To Natura Cosmeticos [View article]

    Thanks for addressing my comment.

    It will be interesting to see how smoothly Solazyme can balance the different roles of selling its own brand and supplying ingredients for Natura's (and others') brands. But this is the kind of problem that is good to have.

    If the established brands had quickly placed attractively priced purchase orders (even highly conditioned on further production milestones) in response to Solazyme's initial development of capacity to make oil for cosmetics, then I doubt Solazyme would have pursued its own branded channel, in light of Solazyme's (sensible) track record of partnering with existing players in other industries.

    My main point is that the announced Natura deal suggests to me that even more sales channels for Solazyme's cosmetics oils are probably much closer to fruition than one would guess just from reading press releases, filings and conference call statements. (Unless, of course, Natura demands certain exclusives, which would force other potential buyers to co-develop new products that are outside these exclusives. Such co-development would have the benefit of allowing other big brands to continue labeling their key ingredients as "proprietary").
    Jun 18, 2015. 12:18 PM | 1 Like Like |Link to Comment
  • Solazyme Begins To Sell Algae Oils To Natura Cosmeticos [View article]
    The Natura deal seems to me more significant than the market has appreciated. Presumably the reason SZYM developed its own cosmetics brand is that existing brands’ initial attitude towards adopting SZYM technology was to move too slowly, and/or at too low a price. SZYM’s success with its own cosmetics brand has increased pressure on other brands to bring forward adoption timing, and has strengthened SZYM’s bargaining position on price. SZYM’s deal with Natura should further strengthen both of these trends.

    The cosmetics industry would naturally be slow to adopt new technologies and be secretive about their origin. Reasons are that this industry has enormous sunk costs of investment in brands that combine mystique and assertions of the supremacy of previous generations of technology. So a natural reaction of major cosmetics brands to new technology like that of SZYM is to:
    (i) delay,
    (ii) hope that it does not gain market acceptance (but the Natura deal has now confirmed that acceptance), and
    (iii) secretly prepare contingency plans (especially advertising and marketing transitions) to adopt it.

    Assuming that SZYM’s technology has objectively better results than prior technology, much of the industry will eventually face increasing pressure to adopt it, but is likely to adopt it in ways that attempt to avoid alerting consumers to the fact that
    ‘our previous technology was inferior to SZYM’s’.

    This will entail minimizing and delaying transparency to consumers and thus to SZYM shareholders. One way to minimize this transparency would be for a non-SZYM entity to replicate SZYM’s production processes in its own facility under a technology license and support service agreement with SZYM. Related fees might initially appear in SZYM’s accounts in a somewhat disguised manner such as “R&D revenues”.

    This type of licensing approach would depend on expectations of quick demand for the entirety of that non-SZYM facility’s output. Thus, this approach would proceed slowly, and not generate much revenue for SZYM, until makers of non-SZYM branded cosmetics have completed their preparations for a major generational update of their production and especially of their advertising and marketing strategies.

    The image of Natura, as a Brazilian company, seems ideal to support the above transitions, because Brazil’s image combines themes like the Rain Forest, mythical Amazons, Carnival, and beach bodies that retain their good looks despite much exposure to sun.

    Much of the above is probably true of many edible products, but the timing might be different, for example, because of differing shelf-life of inventory. Cosmetics inventory throughout its supply chain presumably takes longer to turn over than edible products. In any industry, inventory can be orphaned, returned, discounted and/or brand-diluted if a better new thing is rolled out too fast. This threat is particularly powerful in a cosmetics industry that pretends to be technology-based, but is actually mainly based on advertising-built brand image.
    Jun 17, 2015. 09:42 PM | 2 Likes Like |Link to Comment
  • Solar3D - Fewer Red Flags Than You Think [View article]
    This statement in the article:

    The aforementioned patent expires in August of this year and should make it easier to achieve the needed inventive step requirements.

    ...appears to reflect misunderstanding of patent law.

    An inventive step will be examined by the Patent Office in comparison with all published information -- including what is contained in expired patents. Consequently, any claims in a Panasonic patent that undermine the inventiveness of SLTD's patent applications will continue to undermine them after the Panasonic patent expires.

    (The only consequence of expiry of a Panasonic patent would be that SLTD and others would be free to use items covered by the Panasonic patent without either paying a license fee or being found to infringe the patent).

    If a 20 year-old patent of Panasonic covered an element of a solar cell design likely to accomplish much of SLTD's expectations, then I would expect Pansonic itself to have pursued these accomplishments.

    Lack of progress in patent registration remains to me a huge red flag.
    Apr 16, 2015. 11:04 PM | 5 Likes Like |Link to Comment
  • Red Flags Regarding Solar3D's Technology, Acquisitions, And Evidence Of Paid Promotion [View article]
    Scott, this article demonstrates very impressive writing and analytic skills, along with skills in sleuthing and documenting relevant evidence.

    Shareholders would be prudent to request that the company disclose more information on the points your article has flagged.

    Also useful for the company to disclose would be a roadmap to all patents and/or applications (relevant to its technology) that might have become publicly available (if one knows where to look) on the USPTO website.

    If this is an example of frothy acquisition-fueled growth, then the question would arise as to whether the frothiness and resulting risks are related primarily to solar energy, to broader technology sectors, or to the entire small cap market.
    Apr 11, 2015. 11:49 PM | 3 Likes Like |Link to Comment
  • Solazyme Closes The Year With An Arbitration Win For Its Intellectual Property [View article]
    How do you spell MANIPULATION? How about SHORT COVERING?

    NASDAQ after hours trades yesterday:
    2.75... 2.81... 2.83

    NASDAQ pre-market trades today:
    2.585... 2.32

    These are all relatively small trades. Today's trades below yesterday's market close appear not to have any purpose other than to create an impression of negative market sentiment. (The mirror-image purpose of creating an impression of positive market sentiment might be attributable to yesterday afternoon's trades above yesterday's market close, although it is possible to imagine other purposes).

    Two low-ball sales in the pre-market would certainly be a very small investment for an investor holding a substantial short position, and hoping to close out it out quickly without immediately driving up the market price.

    It would be strange to me if Fiddler's 80,000 share purchase started to catalyze substantial short covering after the Roquette arbitration award failed to do so. Holding SZYM long positions is as much an education in market psychology as much as in bio-technology and related downstream markets.
    Mar 11, 2015. 09:26 AM | Likes Like |Link to Comment