Most likely Solazyme’s press release last night was intended to comfort the market. As such the information contained in the press release was intended by the company to be positive news and it does contains some good news such as more than 30 customers are receiving product shipments from the company and that the 3d-party engineering, procurement and construction firm is no longer on site.
But what puzzles me is the transition of Cole out of his operational role back to the advisory role. Mr. Cole was appointed as president in December 2014 and assumed COO role in January 9 2014. He stayed as operation chief for only 10 months. That is unusual. Solazyme is transitioning from a development company to a commercial company and it has two new plants just getting started with some quite severe ramp-up problems. At this point the most important roles in the company, IMHO, would be president/COO. The company so far has not mentioned who would assume Cole’s role. Would it be better if the company at the same time announced a new COO with solid credentials? This to me is negative news. But obviously the company clearly didn’t think this as negative. The company structured this release as a boost to the dropping stock price. I must have missed something. I hope analysts ask about this in next CC.
I suspect he resigned from his president/COO role to take the responsibility of Moema ramp-up problem. I suspect there will be more operational problems showing up in Moema. These problems will prolong the ramp-up processes and delay volume production schedule. It is not good in building customer confidence in Solazyme’s ability as a reliable supplier. But these types of problems can be expected and fixable. They do not change the long-term investment thesis confidence.
It would be important to see when and who the company will name as president or COO.