In a recent transaction, an executive at Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) sold a significant amount of company stock, according to a new SEC filing. Mark E. Dmytruk, the Chief Financial Officer of the synthetic biology company, sold 1,217 shares at a price of $8.351 per share, totaling over $10,163.
The transaction took place on October 4, 2024, as indicated by the filing. It's worth noting that the sales were made to cover tax withholding obligations related to the vesting of restricted stock and/or restricted stock units. This type of sale, often referred to as a "sell to cover," is typically not considered a discretionary trade by the reporting person, as it is primarily for the purpose of fulfilling tax obligations.
Dmytruk's activity also included the acquisition of shares through the exercise of options on the same date. However, the SEC filing did not disclose any monetary value associated with these acquisitions, which suggests they might have been exercised at a $0 cost basis or that the information was not provided. Such acquisitions are common among executives and are often part of their compensation package, allowing them to buy stock at a predetermined price.
Investors often watch insider transactions as they can provide insights into how the company's leadership views the stock's value and future performance. While sales to cover tax obligations are a routine part of compensation for many executives, the purchase of shares can signal confidence in the company's prospects.
Ginkgo Bioworks, headquartered in Boston, Massachusetts, specializes in designing custom microbes for customers across multiple markets, including nutrition, health, and consumer goods. The company's stock trades under the ticker DNA on the New York Stock Exchange.
In other recent news, Ginkgo Bioworks has experienced a series of significant developments. TD Cowen raised the stock target for the company from $3.00 to $10.00, maintaining a Buy rating. This optimistic outlook followed the launch of Ginkgo Datapoints, a service designed to facilitate the training of AI models in biotechnology. The company also announced its third AI asset, further emphasizing its commitment to growth in the field.
Ginkgo Bioworks' collaboration with Google (NASDAQ:GOOGL) Cloud has also been expanded, enhancing its AI capabilities and leading to the introduction of an open API. Despite a 20% decrease in cell engineering revenue to $36 million, the company continues to project revenues between $120 million to $140 million for the full year.
The New York Stock Exchange (NYSE) has delisted the company's public warrants due to low trading price levels, although this does not affect the company's Class A common stock. Ginkgo Bioworks has regained compliance with NYSE's listing standards after a period of non-compliance and implemented a 1-for-40 reverse stock split. These are recent developments that investors should take into account.
InvestingPro Insights
To provide additional context to the recent insider transaction at Ginkgo Bioworks Holdings, Inc. (NYSE:DNA), let's examine some key financial metrics and insights from InvestingPro.
As of the latest data, Ginkgo Bioworks has a market capitalization of $466.85 million, reflecting its current valuation in the synthetic biology sector. The company's revenue for the last twelve months as of Q2 2024 stood at $184.34 million, with a notable gross profit margin of 80.22%. This high margin suggests that Ginkgo Bioworks maintains strong pricing power for its custom microbe design services.
However, investors should be aware of some challenges facing the company. An InvestingPro Tip indicates that Ginkgo Bioworks is quickly burning through cash, which aligns with the reported operating income of -$698.83 million for the same period. This substantial negative operating income translates to an operating income margin of -379.11%, highlighting the company's current struggle with profitability.
On a more positive note, another InvestingPro Tip reveals that Ginkgo Bioworks holds more cash than debt on its balance sheet. This financial cushion could provide some flexibility as the company navigates its growth phase and works towards profitability.
The stock has shown significant volatility, with a strong return of 47.96% over the last month, contrasting sharply with a -87.85% return over the past year. This recent uptick might explain why the CFO's transaction was limited to covering tax obligations rather than a discretionary sale.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Ginkgo Bioworks, providing a deeper understanding of the company's financial health and market position.
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