Shares of synthetic biology company Ginkgo Bioworks Holdings Inc DNA traded lower by more than 20% on Wednesday.
What Happened? In a new report, Citron Research editor Andrew Left said called Ginkgo "a scheme” and said the company’s recent $24 billion valuation is absurd given it raised capital in 2020 at roughly a $5 billion valuation.
Left's comments come after Scorpion Capital called Ginkgo a “colossal scam” on Wednesday and disclosed a short position in the stock.
Why It’s Important: Left reiterated several red flags that Scorpion pointed out concerning Ginkgo, including an overly promotion CEO, minimal synthetic biology revenue and no proprietary technology or tangible products in the market.
“We’ve too checked with DNA former employees and we don’t think Scorpion is missing anything here,” Left said in the report. “We will let others set targets…Citron just needed to add commentary whenever we see a CEO talking about bringing back dinosaurs.”
Ginkgo Bioworks' high-profile investors include Bill Gates and Ark Invest CEO Cathie Wood, who has large holdings of the stock in both her ARK Genomic Revolution ETF ARKG and her popular ARK Innovation ETF ARKK.
Left has taken a lot of heat from critics since taking a short position and setting a $20 price target for GameStop Corp. GME in January, a move that angered Reddit’s WallStreetBets community.
Following the initial surge in GameStop and alleged threats against his family from GameStop traders, the longtime activist short-seller said he will no longer be issuing short reports.
Instead of recommending a short position in Ginkgo, Left pointed out that investors should find a way to invest in privately-held hedge fund Viking Global, which started buying shares of Ginkgo in the private market at a $200 million valuation.
“And now it is your turn to buy at $24 billion…say what???” Left said.
The company was not immediately available for comment.
Benzinga’s Take: Left always takes a lot of criticism for his missed short calls, and he has been wrong up to this point on GameStop. However, Citron’s annual shareholder letter revealed its average exposure in 2020 was 20% long, and the fund generated a net return of 155% on the year.
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