Driven perhaps by the impetus that stands at the delicate crossroads of brilliance and insanity, a young graduate student at the Salk Institute for Biological Studies in La Jolla, California, performed an experiment that would otherwise appear nonsensical to lay outsiders, mixing strands of messenger RNA with droplets of fat. Nevertheless, the human cells integrated in this mixture absorbed the mRNA — and what’s more, began producing proteins from it.
So sparked what many believe to be the genesis of one of the hallmark achievements of science — and a blistering national resistance movement unparalleled since the long and hard-fought battle for civil rights. Adding intrigue to the storyline was that the student in question, Dr. Robert Malone, would later become a key vocal proponent of said resistance, criticizing the distribution of a vaccine undergirded by an innovation he claims he pioneered.
Debate to this day rages on. While Malone certainly helped forward progress in mRNA-based technologies following his discovery in late 1987 — most prominently characterized by the distribution of COVID-19 vaccines — the science journal Nature stated that in reality, “the path to mRNA vaccines drew on the work of hundreds of researchers over more than 30 years.”
Indeed, the only consensus, per Johns Hopkins Bloomberg School of Public Health, is that mRNA vaccines command a long history. Now, Greenlight Biosciences Inc. seeks to answer the obvious follow-up: what next?
What is Greenlight Biosciences?
Leveraging the myriad innovations presently culminating in the development and distribution of COVID-19 vaccines, Greenlight Biosciences — like any enterprising endeavor — aims to scale the groundbreaking mRNA technology to foster medical and societal solutions that extend far beyond immunization against viruses. From the protection of honeybees to addressing longstanding chronic diseases, Greenlight represents a sorely needed silver lining amid an otherwise catastrophic tragedy.
Thanks to its proprietary mRNA technology that can theoretically deliver high-quality molecular therapeutics at cost-effective scale, Greenlight features two business units: human health and plant and animal health. The former unit involves research in vaccines, monoclonal antibodies and gene therapies while the latter focuses on sustainable food production by inducing pest control and protecting pollination channels.
When is the Greenlight Biosciences IPO Date?
A significant initial public offering (IPO) — or the first time a private enterprise releases its shares to retail investors — Greenlight Biosciences will make its debut on Feb. 3, 2022. Shares will trade on the Nasdaq exchange under the ticker symbol GRNA.
Unlike your typical bread-and-butter new listing, though, Greenlight enjoys the privilege of inking its name on the IPO calendar via a reverse merger with Environmental Impact Acquisition Corp. (NASDAQ: ENVI), a special purpose acquisition company (SPAC). Also known as a shell company or blank-check firm, a SPAC doesn’t have underlying operations of its own. Instead, it becomes a public entity to raise money in support of an eventual merger.
Therefore, as a technicality, it’s Environmental Impact that launched an IPO: Greenlight happened to be the beneficiary. Naturally, such a backdoor method to the public market raises both eyebrows and questions.
Similar to the vaccination debate, Wall Street features its own war of words about the viability of SPACs. To be sure, market performances of companies following a business combination have underperformed the benchmark S&P 500 index over the trailing year. At the same time, blank-check firms enable opportunities to regular public investors that they may not otherwise have.
Here, due diligence and an honest examination of your risk tolerance are vital.
Another factor to consider is the broader timing of this IPO. Though the first two days of February trading have been encouraging, the overriding sentiment is one of concern, especially with the Federal Reserve signaling a hawkish monetary policy. Some analysts have now come out of the woodwork to reveal anticipation of more than the three rate hikes the Fed forecasted would arrive this year.
Such a circumstance would likely rotate additional funds out of risk-on assets — for example, early stage biotechnology firms — into stable, passive-income bearing names, thus boding poorly for GRNA stock. Furthermore, Meta Platforms Inc. (NASDAQ: FB), the company formerly known as Facebook, produced a disappointing earnings miss.
Even more problematic was that the social media and experience firm guided first-quarter revenue below consensus targets, setting off jitters that saw FB stock drop 23% in the after-hours session of Feb. 2, 2022. Though not directly related to Greenlight, a hefty forecast miss by one of the world’s greatest tech companies suggests a wider canvas of pain in the economy.
Greenlight Biosciences Financial History
On a surface level, Greenlight Biosciences appears to be one of the more promising small-capitalization biotech firms entering the public arena. Though it’s difficult to judge potential based on scientific projections, Greenlight commands another type of its namesake hue: robust financial support.
Both the SPAC and the target firm announced late last year that they raised $124.25 million in private investment in public equity (PIPE) funding, including a $10 million strategic investment from Serum Life Sciences Ltd. According to WRALTechWire.com, the “business is a subsidiary of Serum Institute of India Pvt. Ltd., the world’s largest-volume vaccine manufacturer.”
In addition, data from Crunchbase.com reveals that between August 2013 through June 2020, Greenlight raised a total of $215 million through eight funding rounds. Its single-biggest tally during this campaign came on June 16, 2020, which raised $102 million through 12 investors. Leading the proceedings was Morningside Venture Partners, a private-equity and venture-capital firm focusing on novel science and technology sectors.
Despite the enthusiasm over GRNA stock, retail investors should realize that the underlying firm is an aspirational opportunity. True, the science behind Greenlight — manufacturing RNA strands that precisely target specific genes in various life forms — has profound implications in medicine and agriculture. However, the company’s “human-health candidates are in the pre-clinical stage,” while its agricultural solutions are in the “early stages of development or regulatory review,” per Environmental Impact’s press release.
To put it bluntly, Greenlight is neither in the early innings nor in spring training. Rather, it’s somewhere in the minor leagues, which presents tremendous upside potential but in exchange for mind-boggling risk. Therefore, prospective buyers must approach with extreme vigilance and sobriety.
On a final note regarding the financial structure, ENVI stock — the SPAC’s ticker before becoming GRNA stock — closed at $8.82 on the final day prior to its transition. Though details about redemption rates were not available, the slipping below the $10 initial offering price typical of shell companies suggests that more than a few investors bailed out rather than stick with the proposed merger.
Greenlight Biosciences Potential
According to the Pesticide Action Network, commonly distributed solutions covering dozens of widely used products are simultaneously toxic to bees, resulting in catastrophic losses that have severe global consequences. From a United Nations report, “more than 70 of the 100 crops that provide 90 percent of the world's food rely on bees for pollination.”
Lose the bees, lose the human species — it’s really that simple.
More than anything, this harsh reality represents the pivotal catalyst for Greenlight Biosciences as it may provide a best-of-both-worlds solution with its proprietary technology. By delivering pesticides that directly terminate pests like the Colorado potato beetle — responsible for $500 million in worldwide crop damage annually — while still protecting pollination patterns, Greenlight may be the holistic answer.
Still, the biotech graveyard is filled to the brim with aspirational companies that suffered clinical-stage catastrophes. Therefore, approach GRNA stock with a healthy dose of skepticism.
How to Buy Greenlight Biosciences IPO (GRNA) Stock
Interested investors of GRNA must acquire shares at the open, necessitating knowing how to buy stocks. Below is a quick guide.
Step 1: Pick a brokerage.
Since the best brokers compete on similar incentives, focus your efforts on finding the platform ideally suiting your needs.
Step 2: Decide how many shares you want.
IPOs are risky, especially those involving early stage biotechs. Therefore, choose a balanced share count.
Step 3: Choose your order type.
Before trading, learn these market concepts.
- Bid: The buyer’s best offer for a stock.
- Ask: The seller’s lowest acceptable price.
- Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
- Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
- Market order: Market orders guarantee fulfillment but only at the current rate.
- Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
- Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.
Step 4: Execute your trade.
Follow these steps to execute a market order:
- 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).
GRNA Restrictions for Retail Investors
Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t engage if you have privileged information.
Unfortunately, no pre-IPO opportunity is available for GRNA stock.
A Green Light to an Evergreen Opportunity?
Though an unquestionable tragedy, the COVID-19 pandemic represented a baptism of fire for RNA-based medical solutions. Now, Greenlight aims to slingshot scientific momentum to a far greater height. However, aspirational biotech firms are extraordinarily risky, requiring intensive due diligence.