Why Solazyme's Shares Jumped After a Big Loss

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Solazyme jumped as much as 10% today after the company reported earnings.

So what: First-quarter revenue dropped in half to $6.7 million, which was below the $8.5 million Wall Street expected. What got investors excited was an adjusted loss of $0.35 per share, which was $0.08 ahead of estimates.

Now what: Solazyme has been posting massive losses ever since it became a public company and I don't see the good signs in a drop in revenue and another quarterly loss. No one is expecting the company to be profitable this year or even next, so it's difficult to see how investors can determine the value in the company. I would stay far away from this stock and make management prove that it can make money before buying into a technology that will never catch on.

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The article Why Solazyme's Shares Jumped After a Big Loss originally appeared on Fool.com.

Motley Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of Solazyme. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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