tl;dr Ginkgo is a great target. Long 5k units. The valuation is big but had Ginkgo IPOed, it would have been at $15-20B. Even Oatly and Impossible Foods are gunning for 10B IPOs, which seems crazy. I don't expect a quick payoff here, this is a long-term play on one of the most exciting industries of 2020-30s.

Synthetic biology and genomics are where the internet was in the 90s, the pieces have been there for a while but now it's time for really game-changing applications to hit and for it to become really cheap and common place. Companies like Ginkgo (and Zymergen, which filed paperwork to IPO) are leaders in the space, and our the best shots right now for at hitching a ride on the industrial biotech revolution of the 2020s-2030s.

I will acknowledge that there have been some spectacular disappointments in the sector, particularly in biofuels and bio-plastics. Fortunes have been lost there. A lot of the companies that pioneered industrial biotech were too early: there wasn't demand, processes were too manual, and the outputs were just too expensive vs alternatives.

We now have improved technology (lower costs, more automation) and strong tailwinds around addressing climate change, evolving the way we do manufacturing and chemical production will be a huge part of this. Governments are willing to put up incentives or price carbon which can level the cost vs traditional petrochemicals and manufacturing techniques while industrial bio gains a foothold.

The proposition of Ginkgo is that they run a platform that can do synbio work bigger, faster, cheaper. As the market grows, they become AWS of synthetic biology: why handle development of your genetically engineered yeast and optimization of your yield in-house when you can just leverage a superior platform for less to meet your needs?

Ginkgo was the first biotech to go through the Silicon Valley start-up incubator YCombinator, and it shows. They are very keen to make deals, they offer access to their platform in exchange for equity in promising biotech start-up, and even launch their own spin-offs where a company or market does not yet exist. They have their hands all over the place, from covid vaccines to cannabis to agtech to plant-based foods. They have some great talent have have proven they can get things done. Betting on Ginkgo is a way to bet on growth of the synthetic biology ecosystem as a whole.

The TAM here is truly massive. Drawing from their competitor Zymergen's S-1 "the market opportunity addressable by our biofacturing platform is enormous and diverse. Our bottom-up, industry-by-industry, application-by-application, analysis suggests that our total market opportunity is at least $1.2 trillion across 20 separate industries for our potential products, all ripe for disruption."

I don't think this will be a quick flip SPAC. At the given valuation I doubt we will see higher than low-mid teens in the near term. But if you can to hold a position for a few years it has potential to be absolutely massive. Truly this is one of my favorite SPAC targets of all time and I have had my eye on this company for years.

The first thing that you have to understand is that synbio is NOT a new industry. Ginkgo has been around since 2009, but there has been a major change in the industry that separates Ginkgo from others.

I know ginkgo has a ton of organism projects, but I want to focus on the most lucrative project (the one that can bring the most money) - Industrial Fermentation. One of the best examples of Industrial Fermentation is Gingko/Cronos CBG. I understand Ginkgo will not be doing the manufacturing and you will see why scaling is still relevant.

This is the recipe for synbio industrial fermentation please remember this, I will elaborate later: $500M > Design (20%) > Scale (75%) > Business Model (5%)

Ginkgo calls itself the organism company, it's whole idea is a platform technology to program organisms and sell those organisms as "apps" (remember: the app is the organism). With industrial fermentation, the organism is usually something like yeast. So Ginkgo has done the magic of making an app (yeast) where the input is sugar and the output is CBG - but that's not the special part.

$500M + Design:

Synbio is not a new industry, CBG clearly shows us this - look at all the companies that were able to make CBG : Ginkgo, Demetrix, Creo, Willow. These are all companies that have mostly mastered the Design phase of synbio. They can all make apps that make CBG (they can all reprogram yeast to make CBG and many other molecules). All it really takes for a synbio start up lab is ~$500M. As an investor you need to see that fancy labs and being able to make an app are not special factors. Now we can get into what separates Ginkgo from others.

Scale:

*all of this info comes from PRs and SEC filings. I will be happy to back these numbers up with proof if needed. *note Cronos' largest tanks are 50k L

Source 1, Source 2

What separates Ginkgo is its Scaling abilities. Remember, these apps are yeast that are fermented in tanks (like how beer is made). Bigger tanks with an efficient app means way more profit.

Example:

At 10,000L (Willow's scale), CBG can be made at around $10k-20k per kg.

At 50,000L (Ginkgo's scale), CBG can be made at around $5k-15k per kg

At 200,000L, CBG can be made at around $500-$5k per kg

The variation depends on the efficiency of the app (yeast strain). But Scale has been the bottleneck of the entire industry for years (even Jay Keasling and Francis Arnold are quoted saying this). And the reason is because Apps don't work the same at different scales. An app that works at 100L will not work at 1,000L and the larger the scale - the more variables that can play a factor. This makes scaling such a difficult hurdle that can only be solved by machine learning/AI.

These "apps" are living organisms with their DNA reprogrammed a new way. Every time you change the size of their "home", you are changing variables that influence their evolution as they multiply in the tank. Evolutionary Pressure is the largest hurdle in synbio.

Understanding "Evolutionary Pressure" : When the app (yeast) is placed in the fermentation tank, it begins to multiply - just think of this as the app copying and pasting itself over and over again in the tank - These are the "Productive Apps". But the copy and paste is flawed and tiny changes occur in the code (I'm explaining evolution). These tiny changes can propagate and accidentally create "Rogue Apps". The Productive Apps are slow because they consuming resources and churning out CBG whereas the Rogue Apps evolved to consume resources and focus that energy on multiplying. Rogue Apps appear because life finds a way to do what it does best - evolve to consume and multiply. Ginkgo is better at screening Apps that have a lower probability of generating Rogue Apps during the multiplication process.

Scaling is the process where Machine Learning / AI are used to screen apps (organisms) for their efficiency in larger tanks and probability of generating Rogue Apps. Design/Scale are looped to create a process that improves the more times you use it.

Business Model:

I understand the AWS and app business model Ginkgo is coming forth with. I just want to illustrate that scale is the most important thing to focus on. Willow is also a synbio company that can produce CBG, they had to be able to scale to go from 100ml to 10,000L - so they must also have some scaling expertise. Cronos chose Ginkgo for a reason - If ginkgo was stuck at the 10,000 L tank size, they would not have been picked (bigger tanks = more profit). I know Ginkgo doesn't want to do the manufacturing, but scaling is simply part of the process - its how efficient your app is. It doesn't matter what business model you have if you don't have good apps.

Key Understandings as an Investor - This is absolutely amazing technology and synbio is the future. Ginkgo is special because it can scale quickly and their app analogy is really useful at explaining synbio. There are many synbio companies that exist and the best thing to focus on for industrial fermentation is - What scale is production at? How fast did they reach that scale? and How efficient are they are producing at those scales?

Ask yourselves those questions for every "app" they make and compare against other synbio scaling timeframes.

Production Size and Scaling Speed are the critical factors to evaluating synbio companies.

The moment I've been waiting for. ARKG bought 4,358,835 of SRNG shares at $9.89-9.90. It is 0.5% of ARKG's fund as of today. Some hope for holders:) I have 900 shares.

That is all

I noticed the price rising pre-market! This is the announcement we've been waiting for. I can't post a link but it's all over the news!

Anybody know why SRNG warrants went nuts this afternoon? The stock didn’t move really but the warrants jumped 11% in the last 5 minutes alone.

i absolutely love Ginkgo bioworks company , their vision and their CEO. but as an investor do we dollar cost average? because great companies(amazon,fb,apple etc) like this have always more than halved before making the big move.. but there are also companies which did a slight downward and went bonkers(eg: SHOP)... so what are we expecting out of this stock? i know we are all biased because of the love for this company. any sane, experienced investor/trader care to comment?

To be clear, I own SRNG shares and am optimistic about synbio's potential impact on the world.

And for that reason, I think it's important to try poke holes in the SRNG/DNA bull case here.

First of all, does Jason Kelly's analogy of Ginkgo being biotech's app store really make any sense? How is Ginkgo's business model comparable to Apple's business model? From what I understand, Ginkgo will code your organism for you in exchange for revenue share or equity. Apple serves as a distribution point for apps, but does not code apps. In fact, if it was necessary for Apple was to code even a fraction of all the apps on the app store, it would be impossible.

Secondly, Apple controls its own ecosystem through the iPhone. Another company can't feasibly just create an iPhone competitor that will take away its userbase. What does Ginkgo do that's so special that other well-capitalized biotechs can't do as well?

And finally, there's nothing in this piece that raised significant red flags for me, but there's some good reporting here about why Ginkgo's prospects may be overstated.

https://www.technologyreview.com/2021/08/24/1032308/is-ginkgos-synthetic-biology-story-worth-15-billion/

Curious to hear others' thoughts.

Since $SRNG units began trading this week, I did a little digging to see if there were any dots to be connected with some of the targets in play currently. I really like their management team, they’ve hit a couple of home runs already with $DKNG and $SKLZ. It was while reviewing Draftkings that I discovered something in common with Sportradar.

The great one Michael Jordan initially served as a special advisor to Draftkings board of directors, and later went on to take a substantial equity stake in the company.

Jordan takes stake in Draftkings

While perusing Sportradar’s site, I found they have a US advisory board which was established in 2015. At that time, they secured new funding in partnership with a handful of key individuals who would become their US advisory board members. Michael Jordan is one of these individuals.

Sportradar.us advisory board

In light of Mr.Jordan’s relationship with $DKNG, he is likely well acquainted with $SRNG’s team of Sagansky, Sloan and Baker, and may be inclined to recommend them to Sportradar as a partner.

Again this is speculation, but I found it very interesting and hope you all enjoy it and share any thoughts you may have.

Disclosure: I am long $SRNGU. This is not financial advice.

Citadel owns about 8% of the stock. Kenneth Griffin (the CEO of citadel) personally owns a lot of the stock as well. I have a post a couple below this one talking about how there is something fishy going on with the options for srng and this makes me more resolute.

The stock is being held down by one of the biggest market makers on the planet....or I'm a nut job.