According to the latest filings with the U.S. Securities and Exchange Commission, an executive at Ginkgo Bioworks Holdings, Inc. (NYSE: Ginkgo), a leading biotech company, recently conducted a stock transaction. Stephen P. Quinn, the company’s chief accounting officer, sold a total of 316 shares of Class A common stock on September 12, 2024, at a price of $6.172 per share, resulting in a total transaction value of approximately $1,950.
The sale was part of a “sale to cover” transaction, a common practice where executives sell a portion of their shares to cover tax withholding obligations associated with grants of restricted stock and/or restricted stock units. This type of sale is not considered a discretionary trade by the reporting person, as is often required under company financial incentive plans.
The SEC filing also noted that Quinn acquired shares through the exercise of options, known as restricted stock units (RSUs). However, these transactions did not involve an outright purchase at a specific price, and therefore the total value of the transactions associated with these acquisitions was not reported.
Investors may note that the shares held by Quinn following these transactions have been adjusted to reflect the 1-for-40 reverse stock split that Ginkgo Bioworks executed on August 20, 2024. The restricted stock units referred to in the report are scheduled to vest over a period of time, with a portion of them vesting on May 1, 2024, and the remainder vesting in equal monthly installments thereafter.
Headquartered in Boston, Massachusetts, Ginkgo Bioworks specializes in designing personalized microbes for customers in multiple markets, including nutrition, health and consumer goods. The company is publicly traded on the New York Stock Exchange under the symbol DNA.
The filing with the SEC provides an overview of the CEO’s stock transactions and holdings through the reporting date, providing transparency to investors and the market regarding insider activities at Ginkgo Bioworks.
In other recent news, Ginkgo Bioworks Holdings, Inc. has made significant progress. The company regained compliance with the New York Stock Exchange (NYSE) listing standards, after a period of non-compliance. However, the NYSE delisted the company’s public bonds due to low trading prices. Ginkgo Bioworks also executed a 1-for-40 reverse stock split, a move that was reflected in revised stock targets from analysts at BTIG and Goldman Sachs, who set a new price target of $7.00, while maintaining a sell rating on the company.
The company reported expected revenue of $187.0 million, $189.7 million, and $201.7 million for 2024, 2025, and 2026, respectively. Despite a 20% decline in cell engineering revenue to $36 million, Ginkgo Bioworks continues to expect cell engineering revenue to be between $120 million and $140 million for the full year.
Ginkgo Bioworks has also made significant changes to its corporate charter, including provisions to exempt officers from liability. Additionally, the company is implementing cost-cutting strategies and expects to achieve annual savings of more than $85 million. These recent developments reflect the company’s strategic adjustments and financial outlook.
InvestingPro Insights
As investors digest the recent transactions of Stephen B. Quinn, CEO of Ginkgo Bioworks Holdings, Inc., it is important to consider the broader financial context of the company. According to InvestingPro data, Ginkgo Bioworks has a market cap of $345.4 million, which reflects investors’ valuation of the company. Despite the challenges, the company has maintained a strong gross profit margin of 80.22% over the past twelve months as of Q2 2024, demonstrating its ability to retain a significant share of revenue after accounting for cost of goods sold.
InvestingPro’s advice points to a mixed financial picture. On the one hand, Ginkgo Bioworks is trading at a low valuation multiple of earnings, which could indicate that the stock is undervalued relative to its revenue. This is also supported by the fact that the company holds more cash than debt on its balance sheet, providing financial stability. On the other hand, analysts are forecasting a decline in sales in the current year and do not expect the company to post a profit this year. Additionally, the stock has seen a significant decline over the past year, with its total return declining by 91.81%.
For investors considering Ginkgo Bioworks, these insights from InvestingPro could be of great interest. While the company has a strong gross profit margin and cash position, the expected decline in sales and lack of profitability in the near term could raise concerns. Interested parties can find additional InvestingPro tips for Ginkgo Bioworks at InvestingPro, where a total of 17 tips are available that can help investors make a more informed decision.
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