Cathie Wood Loaded Up on Zymergen (ZY) Stock Before Ginkgo Buyout

  • Zymergen (ZY) is being acquired by Ginkgo Bioworks (DNA) in an all-stock deal valued at $300 million.
  • Two of Cathie Wood’s exchange-traded funds have a sizable position in Ginkgo, making it Ark Invest’s 18th-largest position.
  • However, Wood also has been acquiring a position in Zymergen, with the most recent purchase on July 22.
ZY stock - Cathie Wood Loaded Up on Zymergen (ZY) Stock Before Ginkgo Buyout

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Shares of Zymergen (NASDAQ:ZY) are moving higher on “Merger Monday,” with ZY stock up about 15% on the day. The move comes following news of Ginkgo Bioworks (NYSE:DNA) acquiring the company. Both stocks are featured in two of Cathie Wood’s exchange-traded funds: the ARK Innovation ETF (NYSEARCA:ARKK) and the ARK Genomic Revolution ETF (BATS:ARKG).

Ginkgo agreed to acquire Zymergen in an all-stock deal, which values the company at $300 million. The deal is expected to close by the first quarter of 2023. According to the press release, the “acquisition is expected to accelerate the development of Ginkgo’s innovative horizontal synthetic biology platform.”

Ginkgo CEO and co-founder Jason Kelly said, “we have always had incredible respect for the Zymergen team and the strength of the technologies that they have built for cell programming.”

After plenty of drama, Zymergen appears to have finally found a home with Ginkgo. According to Fierce Biotech, earlier this year, the company announced “a new drug discovery business.” At the time, it “claimed to be the world’s largest metagenomics database.”

How Does Cathie Wood Fit Into ZY Stock?

As some readers may remember, Ginkgo stock has become a rather large position in Ark’s holdings. In all of the company’s combined funds, Ginkgo is the 18th-largest holding.

Interestingly though, she’s also been buying ZY stock. In her ARKG fund, Wood began a position in 2021 but hadn’t added to the position since mid-August. That changed in May when the firm began acquiring a larger stake in Zymergen.

ARKG bought almost 1 million shares between May 27 and June 6, then increased its position between June 10 and June 16 when it acquired more than 2 million shares. The ARKG fund then bought almost 1.7 million shares between July 6 and July 22. The company’s last purchases came on Friday and accounted for almost 450,000 shares.

Of course, some investors will insinuate Wood may have known about the pending acquisition. On the other hand, supporters will be quick to point out an all-stock deal does very little to help Wood in what has been a difficult year. While ZY stock is up a modest 15%, DNA stock is down 6%. Further, Wood has a much larger position in the latter.

Unless she has a hedge on Ginkgo, it’s very unlikely the proceeds from the deal in Zymergen even offset the losses in DNA stock.

On the date of publication, Bret Kenwell 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.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.


Article printed from InvestorPlace Media, https://investorplace.com/2022/07/cathie-wood-loaded-up-on-zymergen-zy-stock-before-ginkgo-buyout/.

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