In a recent transaction, Steven P. Coen, the Chief Accounting Officer of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA), sold shares of the company's stock, reportedly to cover tax withholding obligations. The transaction, which took place on July 2, 2024, involved the sale of 13,520 shares at a price of $0.326 per share, totaling approximately $4,407.
This sale was executed to meet the tax liability associated with the vesting of restricted stock and/or restricted stock units, as per the company's equity incentive plans. Such sales are mandated by the company to fulfill tax obligations and are not considered discretionary by the reporting person.
Ginkgo Bioworks, a company operating in the biological products industry, allows its equity incentive plans to stipulate that employees can satisfy their tax withholding requirements through a "sell to cover" transaction. This mechanism is designed to streamline the process for employees to handle their tax obligations resulting from the vesting of equity awards.
The SEC filing also noted that the sold shares were part of a larger number of restricted stock units (RSUs) that vested according to a predefined schedule. For one set of RSUs, 25% of the underlying shares vested on May 1, 2024, with the remainder vesting in 36 equal monthly installments. Another set vested 2/48ths on the same date, followed by vesting in 46 equal monthly installments.
Following the sale, Coen's direct ownership in Ginkgo Bioworks Holdings, Inc. stands at 195,058 shares of Class A Common Stock. The company, headquartered in Boston, MA, continues to operate at the forefront of synthetic biology, offering an array of services that leverage its platform for cell programming.
Investors and followers of Ginkgo Bioworks will be watching closely as the company's executives manage their stock holdings, providing insights into their confidence and commitment to the company's future growth.
In other recent news, Ginkgo Bioworks has undergone significant changes that have drawn the attention of investors and analysts. BTIG recently slashed its price target for the company to $0.20, maintaining a sell rating. This came after Ginkgo Bioworks announced plans to reduce its workforce by at least 35% and downsize its physical footprint by up to 60%, a move aimed at streamlining operations and reducing costs. The company also revealed the departure of Anna Marie Wagner, a key leader holding multiple senior roles.
On the other hand, William Blair downgraded Ginkgo Bioworks from Market Perform to Underperform due to concerns over the company's quarter performance and its shift in business strategy. The company also received a noncompliance notice from the New York Stock Exchange due to the average closing price of its Class A common stock falling below $1 over a consecutive 30 trading-day period.
Despite these challenges, Ginkgo Bioworks aims to achieve adjusted EBITDA breakeven by the end of 2026, supported by a $200 million cut in annualized run rate operating expenses by mid-2025. The company, with $840 million in cash and no bank debt, is reshaping its business model and introducing "lab data as a service" to expand its customer base. These are the latest developments in the ongoing story of Ginkgo Bioworks.
InvestingPro Insights
Amidst executive stock transactions, investors may find it enlightening to review the financial health and market performance of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA). According to InvestingPro data, Ginkgo Bioworks currently holds a market capitalization of $753.2 million. Despite the challenges, the company maintains a high gross profit margin of 80.43% for the last twelve months as of Q1 2024. However, it's important to note that the company has experienced a significant revenue decline of 46.49% during the same period.
InvestingPro Tips suggest that Ginkgo Bioworks has more cash than debt on its balance sheet and liquid assets that exceed short-term obligations, which may provide some cushion against financial headwinds. Yet, analysts do not expect the company to be profitable this year, and there has been a notable price decline over various timeframes, including a 79.7% drop in the one-year total return as of the date provided. This could indicate market skepticism about the company's near-term prospects.
For investors looking for a deeper dive into Ginkgo Bioworks' potential, there are additional InvestingPro Tips available. These tips could provide valuable insights into the company's performance and future outlook. To explore these further, visit https://www.investing.com/pro/DNA and remember to use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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