Why Solazyme's Shares Popped

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 10% today after the company reported earnings.

So what: Revenue decreased 17% to $11.2 million and the company reported a loss of $0.28 per share, both of which were ahead of estimates. But revenue isn't all that important at this phase, so investors were focused on final terms of a commercial supply deal with Sasol and the prospect of significant revenue from production later this year.

Now what: Solazyme has been getting a lot of hype for years now and it's almost time for rubber to hit the road. The biggest concern for the company is that highly valued products will become less valuable as it floods the market with supply, something we saw in the rare-earth-mineral market last year. I'm just not buying the hype, and though I may miss out on a big opportunity, I'll stay out of Solazyme until I see top- and bottom-line results.

Interested in more info on Solazyme? Add it to your watchlist by clicking here.

The article Why Solazyme's Shares Popped originally appeared on Fool.com.

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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