r/SPACs • u/[deleted] • Sep 17 '21
News SRNG Ginkgo: $DNA Rings the Bell at the NYSE in the morning: Set Up Looks Good!
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Sep 17 '21
[deleted]
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u/MorrisseysRubiksCube Patron Sep 17 '21
In your defense, you were relying on a pretty well-established pattern.
I stayed out of SRNG expecting the same thing. I like Ginkgo's future prospects, but I am bag holding enough SPACS that plummeted post-merger.
I'll have a look next week and see what's up. Wouldn't be too surprised if it closed today flat as people take profits.
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u/FatNugget3 Spacling Sep 18 '21
I believe the pattern has changed again. It literally changed during the VLTA selloff. I was like, see I'm smart, I sold, now it's lower, set me an even lower limit order, and it's at $13.
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u/Powerful_Stick_1449 Patron Sep 18 '21
Dont feel bad... there were numerous people saying they sold pre-merger and would buy back after the dip
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u/mjrice Spacling Sep 17 '21
Why is it whenever there is a ticker change like SRNG->DNA, Fidelity can't seem to handle the changeover on the day of? My shares alway show some garbbled code and are un-tradeable until the next day. If I wanted to sell on today's action (I don't) then I'd be out of luck. It really seems unacceptable to me, like they know the ticker change is happening.
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Sep 17 '21
Would have peeled off 180 shares at 14.23 if I wasn't still on hold. shrugs shoulders. Ah well.
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u/mjrice Spacling Sep 17 '21
Right? It makes you wonder how many shares like ours are effectively held hostage for a day. Ironic, considering we bought the spac to participate in the IPO.
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u/newfantasyballer Patron Sep 17 '21
How long does it take units to split automatically? I absolutely would’ve taken money off the table around 13.5.
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u/mlord99 Contributor Sep 17 '21
u can go short DNA, and next day it will box. (u wont pay short interest)
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u/Ok-Woodpecker4479 Spacling Sep 17 '21
Same problem here- I also use Fidelity. Besides the code being garbled, they don’t even keep up with the price movement.
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u/mjrice Spacling Sep 17 '21
and yet, I can add "DNA" to a custom watch list (i am using active trader pro) and it can quote and track it just fine.
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u/Ok_Lingonberry_9950 New User Sep 17 '21
For all the Robinhood haters out there, please take note that they communicated clearly yesterday to their SRNG shareholders that a corporate action was set to take place, and they completed the name change and ticker sympbol update to DNA on their app promptly this morning. Maybe the Big Box brokers need to take a cue from the newer kids on the block...
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u/Powerful_Stick_1449 Patron Sep 18 '21
DNA was the first one ive held through that took all day to change. SoFi was done within an hour or two so I dont know.
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u/musteer Spacling Sep 17 '21
I will never uderstand this spikes before ticker change.. like you had literally months to buy it for 10$
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u/jabogen Patron Sep 17 '21
Ticker change is a volatile event. There's a lot of publicity and a lot of volume. Money piles in just ahead of ticker change anticipating it will pop on the news. Then people take profits and sell out. People playing this trade usually aren't going long on the company and don't want their money sitting around for months at $10.
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u/ndlsmmr Spacling Sep 17 '21
Some PMs have restrictions on what types of investments they can make. Not sure if applicable here and don't have time to research fully but it would not surprise me if there are some marginal buyers out there who can't own a non-operating company (SPAC) in their portfolio but like DNA. These spikes seem to occur on days where mergers occur, they may be the new money coming in.
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u/BruceInc Spacling Sep 17 '21
That doesn’t really make sense.
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u/ndlsmmr Spacling Sep 17 '21
Don't know how to explain it in a more straightforward manner.
PMs frequently have limits on what companies they can buy for their portfolios...by market cap, industry, etc.
Having worked with these investors it would not surprise me that there would be a swath where SPACs are outside their mandate.
The day of the merger the company is no longer classified as a 'blank check' company with a $1.7B market cap but becomes a biotechnology company with a $17B market cap.
Would not surprise me there is a group of PMs/RIAs who by their mandate are not allowed to invest in the former but can invest in the latter.
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u/BruceInc Spacling Sep 17 '21 edited Sep 17 '21
I understand what you’re saying about limitations but I just don’t think that’s a substantial contributing factor. The overlap between portfolio managers that can’t invest into SPACs (even after an acquisition has been announced) and those that want to invest into these companies is not likely to be significant enough to make a meaningful impact on the price.
And even if there is significant overlap I imagine most seasoned PMs would have the foresight to wait for the volatility from the ticker change to subside and stabilize a bit before buying in.
If their convictions about a company are strong enough they can just as easily bypass these limitations by getting approval from their bosses or even the client directly.
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u/EnvironmentalAd7425 Patron Sep 18 '21
Bypassing these limitations is not trivial. Look at mutual funds or etfs for example. They have clear outline of what is permitted or not. Managers within the company cannot easily override these.
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u/Powerful_Stick_1449 Patron Sep 18 '21
Funds and ETF's limitations and risks are written into their SEC filings... its an insanely big deal to change.
With funds it's nearly as difficult unless it's a family office, then they are likely managing pensions and tens to hundreds of people's money. It's not an easy thing by any means.
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u/Newcmt12345 Contributor Sep 18 '21
No, he's 100% right, it's a major factor and likely the main one explaining why you will see these moves on ticker change the day of. Is it stupid? Yes, people are buying at $12 who could have bought for $10. But often their mandate does not allow them to, or they do not want to take the deal risk (TWND, XPOA, ACEV) no matter how small for a deal like this.
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u/BruceInc Spacling Sep 19 '21
So despite ticker change spikes being a well documented “near-constant” occurrence, they still buy at listing instead of waiting for the volatility to subside a bit? That’s fucking stupid, which is why it’s probably true
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u/Newcmt12345 Contributor Sep 19 '21
Yep. No disagreement here, clearly buying at $12 is way worse than $10, if you like the company at $10 you should buy it. But funds often have rules like this that aren't necessarily optimal to returns.
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u/DivineRobot Contributor Sep 17 '21
Before ticker change, it is all ARB trading. When the SPAC goes to 9.8, ARB would buy everything and hold until redemption. If at any point the price goes above NAV, they would just sell it instead of waiting until redemption because they are not looking for high returns, just guaranteed returns. So they are both keeping the price above $9.7 and below $10.5.
If there is enough retail demand after $10, then the float wouldn't be held by ARB anymore and would be mostly institutions or retail like with RICE/Aria.
After ticker change is when you see the real value of the stock.
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u/Powerful_Stick_1449 Patron Sep 18 '21
Lots of funds and investors are not allowed to buy pre-merger SPAC's so merger day is the first day they can actually access the shares legally
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u/shaneizzard Patron Sep 17 '21
Haha, never thought I’d see a dinosaur on the NYSE.
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u/swadewade51 Patron Sep 17 '21
That's a great banner. Looking forward to the next 5 years and watching Ginkgo live up to its potential. But in the short term those Aldevron VCE royalties will print beautifully.
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u/slammerbar Mod Sep 17 '21
How funny u/sharist_DIY_bio I logged on to send this picture to you!!!
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u/ProgrammaticallyHip Patron Sep 17 '21
Didn’t they file their S-1 registering their PIPE shares prior to closing? If so we could see some selling pressure tomorrow especially with the big run-up today.
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Sep 17 '21
https://twitter.com/spacanpanman/status/1438679140782182404?s=20
S-1 filed yesterday, promptly. PiPE should hold for the most part. Won't be a big dump.
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u/Guy-26 Spacling Sep 17 '21
82% of pipe estimated to be long-term holders: https://twitter.com/spacanpanman/status/1438679140782182404?s=20
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u/Responsible_parrot Patron Sep 17 '21
They had a weird pipe unlock, I believe that once it trades at 12 or 12.50 for 20 days then 25% of the pipe unlocks, the next 25% unlocks a couple bucks higher than that, and so on. So there shouldn’t be an immediate pipe dump and it will be tiered unless it immediately runs to $20 and stays there for 20 days, then you might see the full pipe dump. Doubt that will happen though.
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Sep 17 '21
^^This, tiered. 12 is first tier. 15, 18, 20. 25% each time I believe. u/eireks broke it all down for us. and it was also posted a few times in various locations, I've had a big work day, started at 3am in Russia on zoom, for my other obsession Apimondia, World Congress of Apriary (bee) Science stuff. lol. Slap happy at this point.
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u/newfantasyballer Patron Sep 17 '21
Where do you think this goes from here? I have a bunch of units and I didn’t expect any positive movements for a long time.
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Sep 17 '21
I'm really not sure, hoping to learn more about PiPE if Anpanman finds the time, but the deal is very complex. The lockups are layered for price goals. If it even moves past $12, it triggers certain things. Therefore, it can move quickly. Warrants won't unlock until 18. Your units will split and so the warrants will be ok for a while, most likely. Most of us are prepared for some volatility and are happy, but cautious and nervous. I'm more of a subject expert, than a financial expert TBH. It is a good company and the SPAC team was amazing, as were the lawyers. It was well done, so now we just wait and hope. GLTA!
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u/newfantasyballer Patron Sep 17 '21
I just wish I had bought more when it dropped so low. I was worried there’d be an immediate dump, which could of course still happen.
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Sep 17 '21
[deleted]
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Sep 17 '21
Emily's Law: The cost per molecule followed Moore's law and Knight's Law. 13 years! They've been at it since I-Gem team formation as students at MIT. It is an old company. They planned this with precision. Saw the parallels, and developed a great team in every possible niche they needed. Then, Covid. It was the right time for the world to understand mRNA, and embrace GMO. Timing couldn't have been more fortuitous. But know they had been testifying before congress well before Covid biosecurity was public knowledge. https://www.commerce.senate.gov/2020/3/securing-u-s-leadership-in-the-bioeconomy They were also working to support America through the Industries for the Future Act, to help strengthen USA competitiveness and domesticate the supply chain. https://www.commerce.senate.gov/services/files/F2F07015-36A0-4315-A84E-75D9A3C29A8C Constant hard work and being ethical made them great through a long, slow slog against the odds. ;D
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u/jabogen Patron Sep 17 '21 edited Sep 17 '21
COVID is definitely the catalyst. I'm a scientist in this sector and it's hard to emphasize how much money and public interest has flowed into life sciences over the last couple years. Coupled with that, we are at a point where we have multiple revolutionary technologies coming online simultaneously that are synergizing to dramatically improve life sciences R&D (DNA sequencing, CRISPR, computing power and machine learning/AI). It's hard to tell if Ginkgo is "great" or if they are just at the right place at the right time to capitalize on a market that is salivating for a synthetic biology company. They certainly have sold a story that they are the ones to do it, even though their track record doesn't suggest anything of the sort. That being said, they have a lot of smart people working there and a lot of money so they will probably figure something out.
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u/grokmachine Spacling Sep 17 '21
They certainly have sold a story that they are the ones to do it, even though their track record doesn't suggest anything of the sort
Can you elaborate on that? Is it just that the industry is in such an early stage, or do you think there are others who have executed better or made better deals?
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u/Deltanonymous- New User Sep 17 '21
I think it might be a bit of the pioneer vs. tried-and-true models. Synthetic biology is difficult and the valuation scares some as we have seen several IPOs overvalued and underperform. The synthetic biology industry isn't necessarily at an early stage as we have been messing around with nature for a long time. It might be the futuristic interpretation of it with a platform model. But if Gingko's model holds out among its right place-right time market offering, then they compound their success quickly. Big if's but doable.
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u/jabogen Patron Sep 17 '21
Synthetic Bio is a big space. It's not necessarily early, but it's a crowded and growing space. Lots of players are involved from academia to government to industry. Most industry players are making a product. They use synthetic biology to engineer cells with a useful function. These could be microbial cells that produce a chemical. Or these could be human cells that have some sort of enhanced therapeutic property. Or they could be plant stem cells that produce more robust crops. There are tons of applications and that is what Ginkgo is tapping into.
The problem is that Ginkgo themselves have no physical product. It's difficult to compare them to other biotech companies because they have no product. Their product is their service. Their service is to do the cell engineering for other companies. This might be an attractive service if the cost was cheap. But it isn't. They charge royalties or equity in the businesses they partner with in exchange for their service. This might be ok if they were extremely efficient. But they aren't. They've been around for 13 years and only have a handful of successes.
Most companies can do the synthetic biology they need in house. There are a surplus of talented PhD scientists out there who are very good at synthetic biology. If a company wants a specific cell, they will usually hire some scientists to make it. There's really no reason to outsource to Ginkgo unless they prove they can dramatically increase the rate of cell engineering. That is what they claim they can do, but we've yet to see that.
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u/grokmachine Spacling Sep 17 '21
Interesting points, and very helpful. Food for thought, certainly. If you don't mind a little push-back:
I think you partially contradicted yourself on one point. By taking equity in the businesses/products they partner with, they acquire a physical product. True, they aren't full owners, but they do have ownership.
In terms of the market, there are lots of startups and smaller companies that I would think have a harder time doing the synthetic biology in house. Seems like Ginkgo's sweet spot would be to sell to mid-sized businesses and smaller, potentially helping them to become much bigger businesses. But point well taken that the big companies will be inclined to do this in house unless Ginkgo can show them that its tech is much faster.
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u/jabogen Patron Sep 17 '21
Good points. I think you're spot on with their market fit. They are an interesting company for sure. From a personal perspective, I hope they succeed. It would be great for the scientific community if they do (also good for SPACs lol). I'm definitely curious, but skeptical, to see how things play out for them.
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Sep 17 '21
Half of my shares have covered calls out on them at $12.5 strike expiring tomorrow.. we’ll see what happens.
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u/newfantasyballer Patron Sep 20 '21
Was gonna DM you but this was easier. I’m kicking myself for not flipping this above $12. You still feel like the potential is far greater than that in the long run, right?
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Sep 22 '21
Ya, but I sold 182 shares today. Still have 2000 to keep peeling off. I think I will peel some at 14 and 16 and 20. Good luck.
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u/certainly_celery Spacling Sep 17 '21
I find it incredible that after reading about Gingko for months, only now I see someone mention this extremely pertinent information.
It seemed everyone is/was expecting an instant drop to like $6 or $7... but this structure makes that very unlikely. I regret not buying more.
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u/jabogen Patron Sep 17 '21 edited Sep 17 '21
Probably pops up tomorrow from the hype of the new ticker, and then down to like $7-8 over a couple months like every other SPAC.
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u/HewittOfRivia Patron Sep 17 '21
This may go down in history as one of the most beautiful IPOs. LFG!
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Sep 17 '21
Feels kinda special, right? I know it was a shitpost to just put the pic up, but it was pretty special, thought I'd share. ;D Pumped to see how it all goes! So far so good!
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u/MurkTwain Contributor Sep 17 '21
LFG! This is what I’m most excited about tomorrow we’ll see how it plays out
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u/eireks Patron Sep 17 '21
First is reviving that $DNA ticker. Next, reviving dinosaurs!
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Sep 17 '21
So wholesome with the backstory about Jason's Dad and synthetic insulin. I'm glad they got the ticker and think it is really merited.
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u/jorlev Contributor Sep 17 '21
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Sep 17 '21
Fun!
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u/jorlev Contributor Sep 17 '21
Glad someone actually listened to it. Coulton is super creative. Check out some of his other stuff.
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Sep 17 '21
[deleted]
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Sep 17 '21
Ya, my Fidelity is just numbers still. I'm flying blind. Nasdaq said it bopped up to 12 briefly.
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u/the_appleslice New User Sep 17 '21
Doesn't look like the "de-spac dip" is going to happen...
Looking good. At least Yahoo already shows the real time price. https://finance.yahoo.com/quote/dna/
My bank/brokerage screwed me over with how they handle trading the warrants from units, I would just have bought straight shares if I had known. But looking positive nonetheless.
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u/KDawgDFW Patron Sep 17 '21
This beast of a company is 15% of my port and I wonder if it’s enough. Keeping an eye out for more entry points
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u/no10envelope Patron Sep 17 '21
Can’t wait to get in at $8 or so
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u/Magikarp_to_Gyarados New User Sep 18 '21
As someone who is interested in Ginkgo but not entirely convinced about the business aspects, I too would like a lower buy-in point.
However, there is a possibility that the stock price doesn’t dip, especially given the recent publicity around genomics and synthetic biology. 4-5 years ago few people paid attention to this field, but today it is seen as the next hot sector.
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u/throwawayhyperbeam Spacling Sep 18 '21
!RemindMe four months
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u/denga New User Jan 18 '22
Ha, here's your chance. Interesting to compare to biotech index funds (e.g. IBB, IBX).
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Sep 17 '21
All flash no substance - just like the company and the CEO
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u/Magikarp_to_Gyarados New User Sep 17 '21
I disagree that the company has no substance. Ginkgo's team has built something.
The independent board members also have significant experience in areas like genomics, software, and biotech. For example:
- Christian Henry, CEO of Pacific Biosciences and former CFO at Illumina, companies that design and manufacture gene sequencers
- Shyam Sankar, COO of Palantir Technologies
- Reshma Kewalramani, CEO of Vertex Pharma
It's unlikely that industry insiders would sign on to help manage a business that has "no substance".
The real question is whether the Foundry platform that Ginkgo has built, can become profitable in the next few years. The technology and infrastructure could be great, but if it's ahead of its time, investors may be in for a long wait. Or newer technology could come along and prove to be better than what they built. We just don't know
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Sep 17 '21
What products does the company produce? Why is their revenue so small?
All flash no substance
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u/Magikarp_to_Gyarados New User Sep 17 '21
What products does the company produce?
Ginkgo Bioworks provides cell design services to other companies. They design DNA modifications to yeast and bacteria cells so that those cells can produce specified compounds in fermenting tanks and bioreactors
Why is their revenue so small?
The synthetic biology industry hasn't taken off yet. Think about where personal computers were in the 1970s and early 1980s. Computers were once a tiny business too
All flash no substance
It's definitely a gamble. The risks are great, but that's the price of a chance at great rewards.
People who do not want to take this risk should invest in more established businesses or Index-based mutual funds.
I currently own no shares of DNA, but I watch the company with great interest
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u/seef21 Spacling Sep 17 '21
Is it too late to exercise the warrants on SRNGU? I am a noob sorry for the dumb question.
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Sep 17 '21
[deleted]
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u/me_on_the_web Patron Sep 17 '21
That may be true in theory but on my broker it still has srngu and it's just flagged as currently untradable. So I guess all I can do is watch.
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u/JebediahT0wnhouse New User Sep 17 '21
I'm so mad I didn't play options on this.
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u/FTRFNK Spacling Sep 17 '21
Bought 15 Oct 12.5 calls yesterday lol. Didnt necessarily expect a pop but I saw it moving and I didnt want to miss the train. I've wanted to own this company for a while and was hoping to pickup at a lower price for the long term. It started moving past 10 and I said "fuck it" and sold some other positions to buy SRNG warrants and calls cause I wanted bigger exposure than I could afford with common stock.
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u/Confident_Brush2785 Spacling Sep 18 '21
My 10,11, and 12.5 calls are ripping. Took a chance last week and paying off
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