Diving deeply into the digitalization era, modern society often takes for granted the accelerative trajectory of contemporary innovations. But what’s often underappreciated is that the various sources of groundbreaking distinction originate from a uniform and redundant platform.
For instance, while you might notice the difference between a PC-driven interface and one from a completely different operating system, at the end of the day, both systems attain their functionality from similar or identical computer codes and hardware architecture. In other words, you don’t need to buy a new computer just to run a different software program.
However, traditional biological processes involve bespoke or highly customized methodologies, thereby ramping up their complexities and costs. But true to the power of innovation, Ginkgo Bioworks, a pioneer in the field of synthetic biology, aims to disrupt this anachronistic paradigm. By increasing the efficiency and speed of biochemical processes in a cell, Ginkgo could dramatically impact any biologics-based enterprise, generating excitement for its recent initial public offering (IPO).
- When is the Ginkgo Bioworks IPO Date?
- Ginkgo Bioworks Financial History
- Ginkgo Bioworks Potential
- How to Buy Ginkgo Bioworks IPO (DNA) Stock
- DNA Restrictions for Retail Investors
- DNA Pre-IPO
- Entering a Brave New World of Biologics
When is the Ginkgo Bioworks IPO Date?
Perhaps the sign of the times, Ginkgo Bioworks — despite its impressive resume and the potential to be one of the most important companies in the world — decided to enter the public market via a reverse merger with a special purpose acquisition company (SPAC).
On Dec. 23, 2020, Soaring Eagle Acquisition Corp. — which previously had the name Spinning Eagle Acquisition Corp. — filed its Form S-1 registration statement with the Securities and Exchange Commission, detailing its proposal to launch an IPO. At the time, the SPAC’s sponsors had a grand scheme to take multiple organizations public. However, on Feb. 11, 2021, the management team abandoned its attempt at a multi-deal SPAC offering, instead aiming for a single-company merger.
Later, a press release from Ginkgo Bioworks on May 11 declared that the synthetic biologics firm and Soaring Eagle agreed to a business combination. On Sept. 14, shareholders of the SPAC agreed to the deal, setting up a date on the IPO calendar of Sept. 17 when Ginkgo shares can trade under its own ticker symbol DNA on the New York Stock Exchange.
Prior to the business combination announcement, Soaring Eagle attracted significant attention from Wall Street. Institutional investors committed $775 million in an oversubscribed private investment in public equity (PIPE) round, featuring anchoring financial support from Baillie Gifford, Putnam Investments and funds and accounts under Counterpoint Global, a Morgan Stanley (NYSE: MS)-owned portfolio. Goldman Sachs (NYSE: GS) represented the underwriters for the offering.
All told, the Soaring Eagle IPO involved the sale of 150 million shares initially priced at $10 per unit. At the time of the business combination announcement, analysts estimated Ginkgo Bioworks at a $15 billion pre-money equity valuation and expected the deal to provide up to $2.5 billion of primary proceeds.
While SPACs stole business headlines across the globe this year, since mid-February 2021, their performance has disappointed relative to benchmark indices. But given the star institutional power backing DNA stock, much hope exists that this particular brand can help right the ship for shell companies in general.
Ginkgo Bioworks Financial History
On Sept. 16 — just 24 hours ahead of the official debut of DNA stock as its own brand name — shares of Soaring Eagle earned its namesake, towering to a closing price nearly 13% above the prior session’s result. It was an appropriate gift to Ginkgo Bioworks, which while being a heavily aspirational company, holds up the fort quite well with its fiscal prowess.
Indeed, this combination of big ambitions and hard numbers is what separates DNA stock from the daydreamers of biotech. In August, Ginkgo reported that for the first 6 months of 2021, it generated total revenue of $88 million, up 180% from the comparative period 1 year ago, where the company tallied $31 million in sales.
Breaking it down, management reported that it posted sales of $44 million for its biosecurity business, an encouraging performance given the company’s sector forecast for a full-year tally of $50 million. However, the better-than-expected showing isn’t necessarily surprising because of the emerging relevance of biosecurity in light of the COVID-19 pandemic.
As biologics-based innovations continue to reach into the realm of what was previously the exclusive domain of science fiction, government agencies along with industry, academia and civil institutions have an accelerated incentive for such tech to not be used for harm. Ginkgo’s advanced analytics help flag genetic sequences with manmade signatures while leveraging artificial intelligence to distinguish between unnatural and organically evolved viruses.
Moreover, the outperformance of the biosecurity division sent management to the drawing board, with the executive team now ramping up the full-year estimate for the segment to hit at least $75 million. As well, Ginkgo’s foundry business rang up $44 million in the 6 months ending June 30, 2021, an improvement of approximately 42% from the $31 million posted in the 1st half of 2020.
Ginkgo Bioworks Potential
Though the marketing materials of biotech hopefuls litter the airwaves with statement after statement of hyperbole, the potential for Ginkgo Bioworks through its biofoundry and biosecurity businesses is truly paradigm shattering. Should the company succeed in its ambitions, there’s really no upside limit for DNA stock; hence the excitement over its IPO.
Primarily, the broader industry of synthetic biology itself has no limits regarding its potential applications. By enhancing and accelerating biochemical processes, Bio.org explains that modified bacterial chromosomes can be used “in the production of advanced biofuels, bio-products, renewable chemicals, bio-based specialty chemicals (pharmaceutical intermediates, fine chemicals, food ingredients), and in the health care sector as well.”
Better yet, the applications don’t necessarily have to revolve around biology or chemistry. The World Economic Forum explains that “scientists can now instruct specialized microbes to make spider silk in quantities otherwise impossible. Such silk can now be manufactured into fabrics for adventure wear and into armoury for military defence.”
If that wasn’t enough to whet your appetite, Ginkgo has already played a pivotal role in protecting Americans. In fact, the biotech firm assisted Moderna (NASDAQ: MRNA) in optimizing “enzyme production to accelerate the manufacture of its Covid-19 vaccine,” according to a report from The New York Times.
Of course, common sense will dictate your end exposure to DNA stock. As the saying goes, when much is given, much will be required. Ginkgo cannot afford to not justify its market premium but if anybody can deliver on the hype, it would be this company.
How to Buy Ginkgo Bioworks IPO (DNA) Stock
It’s fair to say that SPACs have earned themselves a bad reputation over the trailing year because of their lackluster performance. While these blank-check firms provide an easier way for private enterprises to go public, this same lack of rigorous vetting has proven disastrous for many business combinations.
That said, one element favoring SPAC-based IPOs is democratization. By putting everyone on the same level, retail investors can enjoy a ground floor opportunity by purchasing SPAC shares before the merger announcement.
Also, as publicly traded entities, acquiring shares of shell companies is easy if you already know how to buy stocks. If not, follow the steps below.
Step 1: Pick a brokerage.
Any reputable brokerage will allow you to buy SPACs. However, if you’re serious about traditional public offerings, you should narrow your list of the best brokers to platforms that offer you access to select pre-IPO (or shares at their initial price) opportunities.
Step 2: Decide how many shares you want.
Every IPO features a high level of unpredictability. To mitigate this risk, choose a balanced share count that provides adequate rewards but also limits downside exposure.
Step 3: Choose your order type.
Before placing your first order, get to know these market concepts.
- Bid: This is the buyer’s best offer for a stock.
- Ask: This is the seller’s bottom dollar.
- Spread: The bid-ask price difference (and thus the broker’s term of profitability), the spread also defines risk. A wider spread is more profitable for brokers because they must make the market on a risky venture.
- Limit order: Buy or sell requests at a specific price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the (fluctuating) prevailing rate.
- Stop-loss order: A defensive tool, stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders are likewise protective but only execute (exit) at a predetermined price. However, such orders carry the same nonfulfillment risk as limit orders.
Step 4: Execute your trade.
To execute a market order, follow these steps:
- Select your action type (buy or sell).
- Enter the shares you want to acquire (or sell).
- Hit the Buy (or Sell) button.
Follow the same sequence for limit orders (but include your execution price).
DNA Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons regarding potential conflicts of interest. Securities laws severely penalize profiteering on privileged information.
For interested participants of traditional IPOs, you should consider opening an account with ClickIPO, which distributes select pre-IPO shares to its members.
Entering a Brave New World of Biologics
Although unquestionably a grave human tragedy, the COVID-19 pandemic taught the world that the “analog” methodologies of addressing diseases and especially viruses cannot cope with modern expectations. Ginkgo Bioworks sets the framework for a new paradigm, one where medical institutions can confront public health threats quickly and decisively. The best part of DNA stock? Ginkgo has already proven its viability.