BIONANO GENOMICS INC BNGO S
January 11, 2021 - 5:59pm EST by
jm671
2021 2022
Price: 5.90 EPS 0 0
Shares Out. (in M): 200 P/E 0 0
Market Cap (in $M): 1,180 P/FCF 0 0
Net Debt (in $M): -100 EBIT 0 0
TEV ($): 1,080 TEV/EBIT 0 0
Borrow Cost: Tight 15-50% cost

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Description

large part due to a massive short squeeze. Iborrow indicates a borrow fee of 46% with only 450k
shares available to short. However, the squeeze could soften this week because on Friday
January 8, BNGO did a public offering and sold 29 million shares at $3.05 per share (the
“Offering”) and when these 29 million shares hit investors’ accounts (and most of the shares are
then made available to lend out), the borrow should become much cheaper. The stock is up 100x
since early December (sorry I didn’t write it up as a long then).
 
 
Pro forma the Offering, BNGO has about 200 million shares outstanding and a market cap of
$1.2 billion which seems a bit rich for a company that is guiding to $4 million of revenue for the
December quarter and has historically and should continue to burn cash.
 
 
 
The Offering was lead by Goldman and Morgan who were very eager to introduce their
institutional investor base to the high quality BNGO. Oooopss, I meant the Offering was lead by
Oppenheimer, BTIG, Ladenburg and Maxim who likely sold the shares into their retail customer
base.
 
 
The stock is currently at $6. In addition to selling stock at $3 last friday, BNGO also sold 33
million shares at approximately $1 per share last Oct-Dec via an ATM done with Goldman
Sachs, ooops I meant Ladenburg Thalmann.
 
 
BNGO’s investor base consists of the some of the most respected VC and lifescience investors
around including……..(bueller, bueller ). Sorry I meant the investor has a limited institutional
base (but an active twitter following).
 
 
So why is the stock trading at $6 when its valuation and recent equity offering suggest that price
might be too high. Some of the answers include (i) short squeeze, (ii) “positive” press releases
(that our industry experts believe are not that positive), (iii) momentum investors (lately the
stock trading volume has vastly exceeded its float), (iv) stock is in a hot sector.
Bionano Genomics, Inc. is a life sciences instrumentation company in the genome analysis space
that provides tools and services based on its Saphyr system to scientists and clinicians
conducting genetic research and patient testing, and provides diagnostic testing for those with
autism spectrum disorder (“ASD”) and other neurodevelopmental disabilities through newly
acquired Lineagen, Inc., a wholly owned subsidiary of the Company (“Lineagen”). The
Company currently develops and markets the Saphyr system, a platform for ultra-sensitive and
ultra-specific structural variation detection that is designed to enable researchers and clinicians to
accelerate the search for new diagnostics and therapeutic targets and to streamline the study of
changes in chromosomes, which is known as cytogenetics. The Saphyr system is comprised of an
instrument, chip consumables, reagents and a suite of data analysis tools, and genome analysis
services to provide access to data generated by the Saphyr system for researchers who want to
evaluate Saphyr data quickly and with a low up-front investment.
 
We recognize the dangers of shorting these kind of stocks as the momentum buying can continue
for a while. For those who dislike shorting expensive borrows, you may wish to make this a
potentially quick trade and if our catalyst doeesnt materialize (aka if the borrow doesn’t ease),
cover the short quickly.
 
 

 

I do not hold a position with the issuer such as employment, directorship, or consultancy.
I and/or others I advise do not hold a material investment in the issuer's securities.

Catalyst

Easing of short squeeze as borrow becomes larger

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