$DNA just posted strong earnings and is at a bottom on their chart.
https://twitter.com/TornikeLaghidze/status/1508540863248539649
With positive earnings, I think shorts may begin covering their position. With ConqDTC at 5.8 days this could pump $DNA back to at least $5+? I’ll be observing tomorrow, and possibly taking a calls position.
Thoughts? Started a thread on this to get the ball rolling in case anyone is already a $DNA veteran. Will do more DD tonight.
Got busy so I don’t have much time to do some $DNA DD but here are notes, writing them as I go.
DNA has high high SI% of 44.45% and low Shorts Average Price of $4.85. This tells me that shorts really hate this thing given that NAV was $10 per SPAC deal.
So, why would people short DNA, and do they have reason to cover?
On October 6, 2021, Scorpion Capital published a big short report on DNA. On November 28, 2021, Ginkgo responded to the short report. This article seems to be a comprehensive summary of the whole debacle.
[size=4]My Takeaway[/size]
First of all, I don’t really understand what Gingko actually does but my understanding is that it’s something related to cell programming. Anyways, Gingko has two streams of revenue: Foundry and Biosecurity.
Biosecurity has been mostly focused on COVID, so investors do not care too much about their Biosecurity revenues at this time. What investors care about is Foundry.
One criticism made by Scorpion Capital surrounded “related party” Foundry revenues, something we shared concerns about in our last piece on Ginkgo Bioworks. The idea is basically this.
Ginkgo Bioworks funds STARTUPX with $100 million. Then, STARTUPX becomes a client of Ginkgo Bioworks and starts returning the money which Ginkgo Bioworks reflects as revenues. There’s nothing wrong with this per se, but we can all see why this raises some concerns. That’s why our focus is mainly on Foundry revenues with all related party revenues removed.
In short (heh), it looks like investors want to see organic growth of Foundry revenue without Ginkgo having to buy their revenue.
Very quickly from page 40 of the Q4 2021 ER report published last night, we see that this growth thesis is proving true. Observe the ratio of revenue % of Related Parties vs Third Parties:
Ginkgo posted $113M of Foundry revenue in 2021. This exceeds the 100M projected per page 48 of their SPAC investor deck, and we are all so familiar with overblown SPAC investor decks:
On Barchart we can see that options flow leans bearish for 04/14, but the longer out we go, the more bullish it gets:
Note the OI on the calls and puts for the 4 and 5 strikes on 04/14:
[size=4]My Trading Takeaway[/size]
From my quick DD above, I think shorts have reason to cover:
Major short thesis was the disbelief in Ginkgo pulling organic third-party Foundry revenue. This idea does not seem to be holding water based on the latest ER report.
Shorts are profitable on their position (up about 30% at market close) along with #1 that the short thesis is breaking down. It’s time to take profits and move on.
DTC is 2.8 days with ConqDTC at 5.8 days. If DTC was intraday, I’d think there would be less pressure to cover since you have more flexibility in just getting out and can afford to wait for an ideal candle to exit. With larger DTC you run the risk of having to cover at a higher price by pumping the stock yourself while covering.
There are 53,000 put options for 04/14 that can be closed and dehedged. There are also 42,000 call options, but I think there is a higher chance for calls to be held for more gains or also loaded up fresh. Basically, there are reasons to be long than short now. 4 and 5 strikes are most popular and those are the next to be ITM. To be clear, this is not a gamma squeeze play, but we know that options activity does contribute to stock price movements.
Therefore, tomorrow I will watch DNA and if an uptrend is confirmed, I will probably buy calls.
I entered a mixture of 04/14 4c and 5c
I like this thesis/DD, just got filled on some April and May 4c 
Grabbed a few of those 4c & 5c.
In with 4c. Cheers.
Finally broke 4.47 and is currently bull flagging.
Next levels above I have 4.63, 5.18, and then 6.27.
Hope this goes well.
Broke down from bull flag here but hopefully 4.47 resistance becomes support. Also a 04/14 4c Last Price showed 0.80 for a moment. Someone really wanted that lmao
Thanks for the DD Kevin! Will take a look at this, looks interesting
I read this literally 1h after you posted it, loved the setup and the work done. Got it right away, great returns so far. I think 5$ is not far away with this kind of volume. Great call!
Took 45-50% on calls bought this morning. Might reload if it dips.
Levels broke and held throughout the day today:
Looking for 5.18 tomorrow hopefully
Call to put ratio was astronomical today. That being said, the premium total is quite small. Looks like $DNA isn’t particularly popular.
Spike in dark pool volume today:
Spike in call volume today, but this is likely a big mix of both profit-taking and new call buying
This was a great call-out, I wish I could have played it but all my funds were tied up. Thanks for putting it together 
Looks like most shorts have gotten out as SI went down from 45% to 12%……
The covering didn’t get the type of movement I was hoping for (over $5).
Will be watching for an exit
Wait the short shares are still 70M+ but the % decreased dramatically. I’m confused. I’m not aware of an expansion to the float.
