Jason Kelly, Founder, Ginkgo Bioworks
Scott Mlyn | CNBC
Boston-based Ginkgo Bioworks began trading on the New York Stock Exchange on Friday, becoming the latest company to close a SPAC merger and go public. Shares opened at $11.15 apiece under ticker symbol “DNA,” giving the five-time CNBC Disruptor 50 company a market cap of nearly $2.5 billion.
Ginkgo was started in 2009 by a team of MIT scientists intent on building made-to-order microbes that enable customers to grow rather than manufacture better products. The company calls itself the “organism company” because it designs and prints DNA, the building blocks that support all living things.
The biotech company merged with Soaring Eagle Acquisition Corp., the blank-check firm led by former MGM CEO Harry Sloan. Soaring Eagle Acquisition Corp., Sloan’s seventh SPAC formation, is led by executives of the same blank-check company that brought DraftKings and Skillz to the public markets last year.
A SPAC is a blank-check company that raises money to buy a private entity through a reverse merger and take it public with the help of financing from additional investors. SPAC deals have become an increasingly popular route to go public over the past year, but the pace of offerings has slowed in recent months as returns continue to decline.
The deal included a $775 million private placement led by Baillie Gifford, Putnam Investments and Morgan Stanley Investment Management’s Counterpoint Global arm. So-called PIPE financing is a mechanism for companies to raise capital from a select group of investors that make the final market debut possible. Cathie Wood’s Ark Investment Management, Bain Capital’s public equity arm, Bill Gates’ private investment arm Cascade Investment and T. Rowe Price Associates are also participating.
The proprietary CNBC SPAC 50 Index, which tracks the 50 largest U.S.-based pre-merger blank-check deals by market cap, soared earlier this year but has suffered a steep decline and is now negative on the year. The CNBC SPAC Post Deal Index, which is comprised of the largest SPACs that have come to market and announced a target acquisition, has seen its year-to-date gains wiped out. Still, the CNBC SPAC Post Deal Index was up fractionally in the past week through Monday.
SPACs are getting hit by a rising number of class-action lawsuits, with 15 shareholder suits through the first half of 2021, tripling from just five in all of 2020, according to data from Woodruff Sawyer.
“SPACs have been marketed as a way to go public faster and easier compared to a traditional IPO, but that might tend to attract companies that are perhaps not ready for public company scrutiny. It is certainly the case the plaintiffs are trying to prove,” Priya Huskins, partner at Woodruff Sawyer, recently told CNBC.
Ginkgo Bioworks is a five-time CNBC Disruptor 50 company. Sign up for our weekly, original newsletter that goes beyond the annual Disruptor 50 list, offering a closer look at start-up trends, and founders who continue to innovate across every sector of the economy.
