Cathie Wood, the founder of Ark Invest, is under intense pressure as most of her ETFs implode. The Ark Innovation Fund (ARKK) ETF has crashed by 72% from its highest level in 2021 while the Ark Genomic Revolution ETF (ARKG) is down by 79% from the same period.

Many Cathie Wood’s stocks have plunged since 2021 but one stands out: Ginkgo Bioworks (DNA). The company, which is also backed by Bill Gates, has plunged from its all-time high of $15.86 to a low of $0.97. Its market cap has plunged from over $24.3 billion in 2021 to about $1.7 billion today. It has dropped by 41% this year.

Ginkgo Bioworks is not a company most people know about. It became popular in October 2021 when Scorpion Capital published a scathing attack, accusing the company of being a colossal scam that manipulated.

Ginkgo is a technology company that aims to solve some of the biggest health challenges by enabling customers to program cells just as they program computers. 

By doing that, the firm aims to help biotech and healthcare companies develop drugs and vaccines faster. Some of the customers using its technology are firms like Merck, Novo Nordisk, Cronos Group, Pfizer, and Biogen.

DNA stock price and outstanding shares

There are three main reasons why the stock has crashed hard in the past few years. First, many investors are afraid of investing in a company that has been accused of being a scam, accusations that it has rejected. 

Second, the company has been incinerating cash and diluting its shareholders. Data by SeekingAlpha shows that its annual loss came in at $892 million in 2023, down from $2.1 billion in the previous year. It has lost over $5 billion in the past five years straight even as its revenues rose from $54 million in 2019 to $251 million in 2023.

Ginkgo Bioworks has increased the number of its outstanding shares from 172.5 million in 2021 to over 1.52 billion today. The company still has a strong balance sheet with over $944 million in cash, meaning that it will likely not raise cash this year.

Third, the company’s revenue growth has not been good. The most recent results showed that its revenue came in at $35 million in the fourth quarter, down from $98 million in the same period in 2024. This crash was because of its ramp-down of K-12 testing in its biosecurity business. 

Looking ahead, I still believe that Ginkgo Bioworks is a risky business that could remain under pressure for a long time. This will change if the company demonstrates that it can grow its revenue and profitability well. Before that, it will continue being a speculative asset.

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