Steven P. Coen, the Chief Accounting Officer of Ginkgo Bioworks Holdings, Inc. (NYSE:DNA), has sold a portion of his company stock, primarily to cover tax withholding obligations. The transactions were disclosed in a recent filing with the Securities and Exchange Commission.
Specifically, Mr. Coen sold 13,440 shares of Class A Common Stock on June 3, 2024, at an average price of $0.549 per share, totaling approximately $7,378. This sale was made to satisfy the tax liabilities associated with the vesting of restricted stock units (RSUs). According to the company's equity incentive plans, these "sell to cover" transactions are a means for employees to fulfill their tax obligations directly through the sale of vested shares and are not considered discretionary trades.
In addition to the sales, Mr. Coen also acquired 29,745 shares of Class A Common Stock through the exercise of RSUs on May 31, 2024. These transactions are part of a scheduled vesting plan where a portion of the RSUs vested on May 1, 2024, with the remainder vesting in monthly installments over the following three years.
The footnotes of the filing clarified that each RSU represents a contingent right to receive one share of Ginkgo Bioworks' Class A Common Stock upon vesting. Furthermore, the vesting schedule for the RSUs is structured such that 25% of the underlying shares vested in May 2024, followed by 36 equal monthly installments, while another portion vested 2/48ths in May 2024, with 46 equal monthly installments to follow.
Investors and market watchers often look to insider transactions for signals about executives' confidence in their company's prospects. However, transactions like these that are related to tax obligations provide limited insight into an executive's voluntary trading decisions.
Ginkgo Bioworks Holdings, Inc. specializes in biological engineering and operates in the field of synthetic biology. The company is known for its platform that enables the programming of cells for a variety of applications ranging from pharmaceuticals to agriculture.
In other recent news, Ginkgo Bioworks has been in the spotlight due to a series of significant developments. The company has been downgraded from Neutral to Sell by a BTIG analyst following a difficult quarter and a downward revision of its 2024 revenue guidance. The analyst also expressed concerns over Ginkgo's key "cell program add" metric and the company's shift in commercial strategy.
In addition, 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 is now exploring options to regain compliance within the granted period.
William Blair also downgraded Ginkgo's stock from Market Perform to Underperform, citing concerns over the company's quarterly performance and its shift in business strategy. The firm noted the company's decision to stop focusing on IP ownership could eliminate potential revenue from milestones and royalties.
On the earnings front, Ginkgo Bioworks announced a series of operational changes aimed at achieving adjusted EBITDA breakeven by the end of 2026. These changes include significant headcount reductions and 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
Steven P. Coen's recent stock transactions at Ginkgo Bioworks Holdings, Inc. occur against a backdrop of significant financial metrics and market performance. According to real-time data from InvestingPro, Ginkgo Bioworks currently holds a Market Cap of approximately $1.15 billion USD. Despite the company's strong Gross Profit Margin of 80.43% in the last twelve months as of Q1 2024, it is apparent that Ginkgo Bioworks has been experiencing considerable challenges, with a Revenue Growth of -46.49% over the same period.
Investors considering the implications of Mr. Coen's stock sale may find two InvestingPro Tips particularly pertinent. Firstly, Ginkgo Bioworks is holding more cash than debt on its balance sheet, which can be a sign of financial stability and may mitigate some investor concerns. Secondly, the Relative Strength Index (RSI) suggests that the stock is currently in oversold territory, which could indicate a potential rebound or at least a pause in the downward trend for the stock price.
These insights could be crucial for investors trying to understand the company's financial position and future outlook. For those interested in a deeper dive, there are additional InvestingPro Tips available, which can be accessed through InvestingPro's platform. Moreover, for a limited time, users can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a wealth of financial analysis and expert insights.
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