Short-sellers appear to be picking up the pace of late. Indeed, while many short-sellers may have run for the hills earlier this year due to various meme-stock rallies for highly shorted stocks, it appears those going short have reason to be overly aggressive right now. One such short candidate that’s in the spotlight today is Ginko Bioworks (NYSE:DNA) and DNA stock.
Indeed, valuations remain elevated in various speculative sectors of the market. Accordingly, short-sellers appear to see some opportunity to highlight areas of froth ripe for reevaluation.
Today, DNA stock is being highlighted by Scorpion Capital as a potential short candidate. Whether this stock may turn into a short-squeeze candidate if enough short-sellers pile on remains to be seen. However, for now, the market sentiment on DNA stock is overly bearish. Currently, this stock is down 20% at the time of writing.
Let’s dive into what this short report outlines.
DNA Stock Down on Scorpion Capital Short Report
- Activist short-seller Scorpion Capital announced its short position today on Ginko Bioworks.
- Via a detailed short report, the company outlines concerns with Ginko’s overall business.
- The company posits “a snake oil salesman” and hedge funds have partnered to create a scam.
- This business is one Scorpion describes as a house of cards and “one of the most brazen frauds of the last 20 years.”
- Additionally, Scorpion calls Ginko’s business model a dubious shell game.
- Scorpion believes “that at least half of Ginkgo’s reported foundry revenue is phantom — that is, non-cash and pure accounting hocus-pocus.”
- According to Scorpion, this phantom revenue comes mainly from related party customers, providing an elaborate fiction as to the company’s true underlying fundamentals.
We have yet to see a response from Ginko on these comments but will follow these developments as they unfold.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.