Gingko Bioworks’ crumbling stock has been especially volatile this week.
On Monday alone the shares dropped more than 7.21 percent, while on Tuesday they rebounded 2.8 percent to close at $2.91. Unfortunately, the stock has been more than halved since February 1 and is down about 80 percent from its all-time high, making it just one of many companies that went public last year but have since collapsed in price.
One possible reason that Ginkgo has experienced high volatility so far this week is that on Monday, certain shareholders were able to sell their stock when their six-month lockup expired.
Ginkgo Bioworks is the synthetic biotech company that went public in late September after merging with the special purpose acquisition company Soaring Eagle Acquisition Corp. The deal resulted in total proceeds exceeding $1.6 billion and a $15 billion enterprise value, according to a Ginkgo press release at the time.
Several weeks later, however, Ginkgo and its shareholders were rocked when Scorpion Capital fired off a scathing, 175-page report calling Ginkgo “a colossal scam, a Frankenstein mash-up of the worst frauds of the last 20 years.”
Cascade Investment, Bill Gates’ private investment arm, was the second-largest shareholder when the company went public, and it remained in that position at year-end, according to regulatory filings.
Jason Kelly, chief executive officer of Ginkgo Bioworks, told Institutional Investor in an earlier e-mail communication that the biggest hedge fund shareholder at the time of the merger was Viking Global Investors, the Tiger Cub that had been investing in the company since 2015 and was the first large institutional investor in Ginkgo.
When Ginkgo went public, Viking Global Opportunities, the hedge fund firm’s hybrid fund, was by far the largest investor with a little more than 339 million new Ginkgo Class A shares, or 24.6 percent of the total number before it began trading. This included shares acquired from participating in the $775 million PIPE deal. Viking Global Opportunities also owned 5 percent of the voting power.
Two other firms known for their hedge funds also owned more than 5 percent of the new shares: Senator Global Opportunity Master Fund, and entities affiliated with Anchorage Capital Group.
A number of other hedge funds participated in the PIPE for $10 per share, including Casdin Partners Master Fund, entities associated with Millennium Management, Citadel, 40 North Management, Highline Capital Master Fund, and Tudor Investment Corp., through an entity called Xantium Partners.
On March 2, Viking appeared to cut its stake in the common stock by more than 80 percent when it unloaded nearly 290 million shares, which was the bulk of its holdings. According to its 13D filing, Viking “agreed to surrender” the shares, so it owns no more than 4.99 percent of the common shares. Under the arrangement, Viking would then receive an equal number of Class C common stock.
It is not clear why this transaction took place or how it affects Viking’s investment. Viking did not respond to a request for comment, and Ginkgo also declined to comment on the transaction.
Keep in mind that shareholders of Ginkgo before the merger were able to sell their shares after six months. Shareholders of the SPAC or investors in the PIPE have a one-year lockup.
So, at the end of the fourth quarter, Anchorage was the eighth-largest shareholder and the stock was its largest U.S. long. It also added two million shares during the quarter. Senator was the ninth-largest shareholder, and it too counted Ginkgo as its largest long.
“As a general rule, we don’t comment on Ginkgo’s stock price,” a Gingko spokesperson said in an e-mail exchange. “However, Ginkgo, its peers, and the growth sector of the market generally have experienced downward pricing pressures in the current macroeconomic environment. Despite this, we’ve never been more excited about Ginkgo and our potential.”
Ginkgo’s deadline for filing its 10-K — its annual report — is March 31.
