(Bloomberg) — Zymergen Inc. rallied as much as 87% after one of Cathie Wood’s Ark Investment Management LLC funds scooped up its shares.
The buying occurred amid Wednesday’s 76% retreat, a record slide that took the synthetic biology company to the lowest since its April debut, after the firm pulled its forecast for 2021 sales and announced the departure of its chief executive officer. Despite the rebound, the stock is down more than 50% since going public at $31 a share.
Zymergen said it’s working to restore investor trust after customers were running into trouble getting its bioprocessed film meant for use in items like foldable smartphones implemented into their manufacturing processes. But skepticism has grown among Wall Street analysts. William Blair’s Matt Larew, who downgraded the stock to the equivalent of neutral, said its credibility was “destroyed.”
The stock triggered a trading halt at the market open after word that the retail-trading guru’s ARK Genomic Revolution fund, which trades as ARKG, had snapped up 2.47 million shares. Thursday’s gains meant the Emeryville, California-based company had followed up its worst day of market losses with it’s biggest one-day gain.
The ARKG ETF has peeled off about 5% so far this year with some of the fund’s biggest bets like Teladoc Health Inc., Exact Sciences Corp. and Vertex Pharmaceuticals Inc. posting double-digit declines.
Other high profile Zymergen backers include the SoftBank Vision Fund LP with about a 27% stake as of April 26, according to Bloomberg data, as well as Singapore’s sovereign wealth fund GIC Pte Ltd and U.K. fund behemoth Baillie Gifford & Co.
Ark didn’t immediately respond to emails seeking comment.
Zymergen has four hold ratings and two sell recommendations, according to data compiled by Bloomberg. Nobody currently rates it a buy, compared with six such calls last week.
(Updates to include details on product in third paragraph, analyst coverage in final.)
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