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Harris & Harris Group, Inc. Message Board

  • yinvestor yinvestor May 30, 2013 2:33 PM Flag

    Potential gain from SZYM

    TINY holds around 1.6M shares of SZYM.
    On December 31, 2012, SZYM was trading at $7.86, now it's trading at $11.86.
    Which means the net value of TINY has increased $4 * 1.6M = $6.4M

    If SZYM goes to $15(very likely based on the chart), then the net value of TINY will increase
    $7.14 * 1.6M = $11.4M, more than 10% increase on the net value and will increase the net value to
    $4.5 per share.

    This along should take TINY to $3.5 level.
    Not to mention the D-Wave good news for TINY.

    Sentiment: Strong Buy

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    • I decided to buy TINY primarily as a proxy for SZYM. But it seems that very often TINY is flat to down whenever SZYM is up, as it is so far today as well.

      Sentiment: Strong Buy

    • SZYM is back now.

      Sentiment: Strong Buy

    • they really "own" just under 1 million shares. they lost 20,000 in April and will loose another 540,000 come June unless the price takes a dump under $10 by June 23rd.

      from their latest 10Q

      As of March 31, 2013, we had 560,000 of our remaining 1,546,490 shares of Solazyme under the following option contracts:

      No. of Shares Expiration Date Strike Price
      20,000 April 20, 2013 $ 7.50
      540,000 June 22, 2013 $ 10.00

      • 2 Replies to ronmalenfant
      • chimchim_monkey_at_large chimchim_monkey_at_large May 31, 2013 12:49 PM Flag

        Actually, the actual situation is a little bit different. (Everything you (ronmalenfant) wrote was correct, but there was more information in the 10Q. Look at page 56 of the 10Q, "Subsequent Events".")

        The wrote 300 more 7.50 calls with an April strike in April, and purchased puts with the proceeds. The puts expired worthless, and the shares covered by the April calls (all 50,000 shares, including the 200 contracts that were previously written) were called away at 7.50.

        They also sold another 108,000 shares on the open market in late April and May for an avg sales price of 8.44.

        They may have bought back some of the June options. There is only an open interest of 4400 contacts or so in the June 10 calls right now, which would seem to indicate that they must have bought back some of their 5400 contracts, but it is not impossible that they originally sold the contracts in a private transaction that is not reflected on the options market. If they did buy back some of the contracts, they may have bought them back at a loss, but that is not possible to say yet. Any that they buy back now will definitely be at a loss, unless SZYM drops back to 10 or below.

        Although they are in the black for sure with their SZYM investment (they have already recovered their investment and then some), I think they have been shortsighted about their handling of the position. Solazyme is in a remarkably good position and has demonstrated that they have excellent management, and although there are no guarantees, I would not be surprised to see SZYM as a 4 or 5 billion company in market cap in two years as their sales ramp up at an astonishing rate. That would mean a stock price of over 50, and therefore I wish TINY had kept the lion's share of the shares they had at the IPO. As it is, they have sold off or pledged more than half of their shares already for an average price I would ball park at around $11.

      • Good catch but they still have option to buy the options back.
        I hope they will stop selling options since apparently this stock is going much higher this year.

        if I were them, I would not have sold a single share of SZYM.
        Or I might have sold it at $25 and bought it back at $7 - $8 as a long-term strategy investment.

        Anyway, SZYM is just one of their investments which could bring their net worth to $4.50 by the end of this year.

        If this is any IPO news coming this year, the stock price could easily break $5.
        It's not easy to find a really undervalued stock nowadays when DOW is at historical high.

        Sentiment: Strong Buy

    • SZYM actually has a lot of potential than $15, it's IPO price was $18 and its historical high is $25.
      TINY stated that there will very likely to be a few IPOs in 24 months but 1 IPO in 12 month.

      Based on the chart, TINY really needs this kind of IPO good news to push it to $5 level.

      Sentiment: Strong Buy

      • 1 Reply to yinvestor
      • Actuaally, post-IPO the stock got above 27..

        Reagrdless, ANY WAY you 'slice it,' TINy mgt has consistently and miserably bubgled its handling of the SZYM position.

        And should investors have expected anything more else from a mgt. outfit that has ONLY focused upon its own insular pocketbooks 'needs' for several years running?

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