Posted on 10/07/2021
On October 6, 2021, short seller Scorpion Capital released a damaging 175-page report alleging that Ginkgo Bioworks Holdings, Inc. is a “colossal scam.” The report shows the company is highly dependent on related-party transaction revenues. The report charges that the company is a “Frankenstein mash-up of the worst frauds of the last 20 years.” Founded in 2009, Ginkgo Bioworks specializes in using genetic engineering to produce bacteria with industrial applications.
Ginkgo Bioworks Holdings went public through a SPAC transaction with blank check company Soaring Eagle Acquisition Corporation in September 2021.
Major investors in Ginkgo Bioworks before it went public include hedge fund Viking Global Investors, Bill Gates’ family office Cascade Investment, and General Atlantic. Cascade and Viking Global also participated in investing in a number of associated-platform companies of Ginkgo Bioworks.
How Much of the Reported Revenue is Actually Cash and Not Related-Party Revenue?
Scorpion Capital found that related-party revenue for Ginkgo Bioworks was 65% of foundry revenue in 2019 and 72% of foundry revenue in 2020. Scorpion Capital estimates that non-cash revenue for 2020 was 47%. In the last twelve months ended June 30, 2021, Ginkgo Bioworks reported revenue of US$ 133.1 million and a net loss of US$ 200.5 million. The company’s operating margin for that period was -155.8%.
Ginkgo Bioworks created new entities for its platform that it funds…