Ginkgo Bioworks Holdings, Inc. (NYSE:DNA) reported that its Chief Financial Officer, Mark E. Dmytruk, engaged in transactions involving the company's stock, as per a recent SEC filing. The transactions included the exercise of options and the subsequent sale of shares.
On May 31, 2024, Dmytruk exercised options to acquire a total of 106,490 shares of Class A Common Stock of Ginkgo Bioworks at no cost. Following these transactions, the CFO held over 1 million shares in the company. Additionally, Dmytruk converted 1,638 shares of Class B Common Stock into Class A Common Stock, further adjusting his holdings.
However, on June 3, 2024, Dmytruk sold 48,866 shares of Class A Common Stock at an average price of $0.549 per share, totaling approximately $26,827. This sale was made to cover tax withholding obligations related to the vesting of restricted stock and/or restricted stock units. According to the filing, such sales are not considered discretionary trades by the reporting person, as the company's equity incentive plans may require the use of a "sell to cover" transaction to satisfy tax withholding obligations.
After these transactions, Dmytruk's ownership in the company decreased to 984,662 shares of Class A Common Stock. The SEC filing also indicated that the restricted stock units (RSUs) involved in the transactions represent a contingent right to receive shares of the issuer's Class A Common Stock, and they vest in 48 equal monthly installments.
Investors often monitor the buying and selling activities of company insiders like CFOs, as these can provide insights into the executives' perspectives on the company's current valuation and future prospects.
In other recent news, Ginkgo Bioworks Holdings Inc. has been under the spotlight due to several developments. The company missed Q1 expectations and downgraded its 2024 revenue guidance. Furthermore, it announced plans to reduce both headcount and physical footprint by over 25% and up to 60%, respectively. BTIG analysts downgraded the company's stock from Neutral to Sell, citing concerns about Ginkgo's key "cell program add" metric and its predictability for future revenue.
Also, Ginkgo 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. The company has a six-month period to meet the minimum price requirement and plans to comply with the NYSE's listing standards within this period.
William Blair also issued a downgrade for Ginkgo, changing its rating from Market Perform to Underperform. The firm highlighted concerns over the company's quarter performance and its shift in business strategy. Meanwhile, Ginkgo outlined a series of operational changes in its latest earnings call aimed at achieving adjusted EBITDA breakeven by the end of 2026. The company plans for significant headcount reductions and operational improvements, including a $200 million cut in annualized run rate operating expenses by mid-2025. Despite a decline in Q1 2024 revenue from its cell engineering business, Ginkgo maintains a solid financial position with $840 million in cash and no bank debt.
InvestingPro Insights
Amid the news of Ginkgo Bioworks Holdings CFO's recent stock transactions, investors are closely scrutinizing the company's financial health and market performance. According to InvestingPro data, Ginkgo Bioworks currently holds a market capitalization of 1.15 billion USD, with a notably high gross profit margin of 80.43% for the last twelve months as of Q1 2024. Despite this, the company's revenue has declined by 46.49% during the same period, reflecting challenges in maintaining its top-line growth.
InvestingPro Tips reveal that Ginkgo Bioworks has been experiencing significant price drops, trading near its 52-week low, with a 1-month price total return of -44.61%. This could suggest that the market is reacting to the company's financial performance and future outlook. Additionally, the stock's RSI indicates it is in oversold territory, which might attract investors looking for potential undervalued opportunities.
For those interested in a deeper analysis, InvestingPro offers additional tips that could further inform investment decisions. There are currently 15 more InvestingPro Tips available for Ginkgo Bioworks, which can be accessed at: https://www.investing.com/pro/DNA. To enhance your investing strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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