Did Solazyme Inc (SZYM) Just Get Riskier?

This isn’t exactly comforting news — there’s a lot of “wait and see” here — but I’m not a proponent of the kind of panic selling going on today. Granted, a nearly 20% fall feels dreadful, but we shouldn’t rule out that the partnership’s dissolution may actually end up being better for the long term, not worse. Solazyme said that the failed partnership will not affect this year’s revenue; if it can accelerate ramping up its business, then it could be a strategic positive for its shareholders.

Meanwhile, compare Solazyme Inc (NASDAQ:SZYM) to some of the other biofuels companies. Amyris Inc (NASDAQ:AMRS) is currently in legal hot water due to its consistent inability to get its fuel production up and running at all. News of lawsuits has overshadowed any sign of good news.

Several days ago, another rival, Gevo, Inc. (NASDAQ:GEVO), which enjoys the backing of France’s Total, finally restarted its isobutanol plant that it shut down in September due to contamination issues. The shutdown had resulted in a scary 92% decrease in revenue in the third quarter, and while Gevo, Inc. (NASDAQ:GEVO)’s now getting back into the game, it’s obviously lost traction and time, and the plant isn’t even back to full production capacity yet.

Solazyme isn’t for those averse to risk, but it’s still ahead of the game as many other similar companies have struggled to get their technologies into the commercial phase. Let’s acknowledge Solazyme’s risks, but shut down the temptation to panic with all the others. Personally, I’m holding on and watching with interest.

The article Did Solazyme Just Get Riskier? originally appeared on Fool.com and is written by Alyce Lomax.

Alyce Lomax owns shares of Solazyme. The Motley Fool recommends Unilever. The Motley Fool owns shares of Solazyme.

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