Seeing a potential value opportunity in a newly public company, Viking Global leader Andreas Halvorsen (Trades, Portfolio) disclosed a stake in Ginkgo Bioworks Holdings Inc. (DNA, Financial) earlier this week.
In addition to considering cyclical and secular industry trends, the guru's Connecticut-based hedge fund selects stocks based on its understanding of the business' fundamentals and management team. Halvorsen is a former protégé of Tiger Management's Julian Robertson (Trades, Portfolio).
Having invested in the company in an initial funding round in 2015, GuruFocus Real-Time Picks, a Premium feature, shows Halvorsen revealed a 302.9 million-share stake in the Boston-based biotech company on Sept. 16, dedicating 10.08% of the equity portfolio to the holding. The stock traded for an average price of $12.18 per share on the day of the transaction.
The company, which specializes in using genetic engineering to produce bacteria with a number of industrial applications, inked a merger agreement with special purpose acquisition company Soaring Eagle Acquisition Corp. (SRNGU, Financial) in May. The deal officially closed on Sept. 16.
Founded in 2008 by graduates of the Massachusetts Institute of Technology, the company is building a platform that enables the design and growth of organisms that can produce valuable biological products across diverse markets, ranging from cosmetics and agriculture to industrial chemicals and pharmaceuticals.
Through the merger, the company will be able to expand its cell programming platform. In a statement, Gingko Bioworks co-founder and CEO Jason Kelly expressed his excitement for the deal and what it means for the future.
“The magic of biology is that cells run on digital code similar to a computer, except that instead of 0s and 1s it's As, Ts, Cs and Gs," he said. "Ginkgo's platform makes it easier to program this code, and we are making this platform available to organizations working to solve our most pressing problems. From mRNA vaccines reaching people's arms to combating climate change, the opportunity to work with programmed cells has never been more apparent.”
Gingko Bioworks has a $24.11 billion market cap; its shares were trading around $12.43 on Tuesday with a price-sales ratio of 0.59.
Since its market debut on Sept. 17, the stock has gained around 1.6%.
Having been listed as an initial investor in a press release announcing the combination, Halvorsen’s Viking Global currently holds 15.48% of Gingko’s outstanding shares. Other guru investors who were also named as early backers of the deal include Baillie Gifford (Trades, Portfolio), Catherine Wood (Trades, Portfolio)’s ARK Investment Management and T. Rowe Price.
Portfolio composition
Halvorsen’s $32.93 billion equity portfolio, which was composed of 87 stocks as of the end of the second quarter, is largely invested in the health care and technology sectors.
Other biotech companies Viking Global had positions in as of June 30 included BidgeBio Pharma Inc. (BBIO, Financial), Adaptive Biotechnologies Corp. (ADPT, Financial), Zai Lab Ltd. (ZLAB, Financial), Intellia Therapeutics Inc. (NTLA, Financial), Inhibrx Inc. (INBX, Financial) and Royalty Pharma PLC (RPRX, Financial).
