When I listed the stocks in my portfolio, I wrote “SZYM is an exception to my policy of not buying money-losing startups.”

Well today they announced the beginning of commercial operations in two of their plants. This must have been what the market wanted to hear, as they are up an incredible 30.5% as I write.


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SZYM closed up almost 33% today due to the announcements you referred to, Saul. Here is the reason stated in MarketWatch:

Biofuel maker Solazyme up 12%, announces commercial opsFont size: A | A | A
11:14 AM ET 1/31/14 | MarketWatch
By Claudia Assis, MarketWatch

SAN FRANCISCO (MarketWatch) – Shares of biofuels maker Solazyme Inc. rallied 12% on Friday after the company said it started commercial operations at two facilities in Iowa, with products being sold and distributed in the U.S. and Brazil.

That was a “major milestone” for Solazyme (SZYM), analysts at Cowen and Co. said.

The products are being made at an Archer Daniel Midland Co. (ADM) plant in Clinton, Iowa, and a facility operated by American Natural Products in Galva, Iowa. Three types of tailored oil have been produced and sold through spot orders, supply agreements, and reorders, the company said. They include lubricants and personal-care oils.

Tailored oils are functionally superior and offer advantages such as continuous and consistent production, with no harvest periods or weather variations, the Cowen analysts said.

Solazyme “should be able to gain market share while enjoying attractive margins. A green premium for sustainability may be valuable to various customers, but that is on top of straightforward functional and commercial benefits,” the analysts, led by Robert Stone, said.

Solazyme said it expects to ramp up production at the ADM and ANP plants to 20,000 metric tons a year within the next 12 to 18 months.

This is “likely conservative,” the Cowen analysts said, given ADM’s previous experience in running the plant for another partner. The analysts said they expected 40,000 metric tons a year starting in the second half of 2015.

Solazyme went public in 2011. Shares have gained 40% in the past 12 months, and 5.4% in the past three months.


Long SZYM with a small position