Does ARK Invest In BNGO?

ARK Invest BNGO: Late in 2020, noted ARK Invest fund manager Cathie Wood made a brief but favorable mention of Bionano Genomics (NASDAQ:BNGO). The company, then an obscure biomedical startup, skyrocketed over the next few months. In large part, this phenomenon was linked to the so-called “meme stock” craze of late 2020 and early 2021. As with other companies, social media users convinced of Bionano’s potential bid the price beyond reasonable limits before it ultimately self-corrected.

Since then, however, interest in BNGO has remained high. In particular, many investors have wondered what, if any, stake Cathie Wood and ARK Invest ultimately assumed in the company. Here’s what you need to know about Bionano Genomics, its potential as an investment and ARK Invest’s relationship with it.

 

 

The company’s platform, known as Saphyr, allows both clinicians and scientific researchers to derive insights from DNA by sequencing genomic data.

 

Specifically, Saphyr uses optical imaging to detect the structure of DNA molecules. In addition to its core genetics work, the company also offers diagnostic testing for certain neurodevelopmental disorders.

 

As of the time of this writing, it does not appear that Cathie Wood or ARK are invested in Bionano Genomics.

 

While there are many companies engaged in genetic sequencing and research among those holdings, no mention is made in the fund holding Bionano Genomics.

 

In some cases, funds do not disclose holdings when shareholding is under certain threshold limits. Is that possible here? We can only speculate.

 

Of course, the fact that ARK is not invested in BNGO doesn’t automatically rule it out as a potential buy. The company is, however, a speculative proposition.

 

Why Is BNGO Stock Dropping? Despite some promising research, Bionano Genomics has posted consistent losses and will likely continue to do so for some time. Because it is such a young company, it’s difficult to say whether and when it could achieve profitability and hit its stride.

 

Turning to analyst ratings of the stock, a more positive picture emerges. At the moment, the average of three 12-month price forecasts places the stock at $12, up from its current price of $2.75.

 

While this would clearly be a massive gain for investors, it’s important to keep in mind that these ratings represent a small number of forecasts for a very speculative stock. As a result, they’re worth considering but should also be taken with a grain of salt.

Is BNGO Stock A Good Investment? There’s also a good reason to believe that BNGO could be a bargain-priced play on a lucrative field of biomedical testing. A price spike followed by a dramatic decline last year left BNGO reasonably priced, opening up potential opportunities for investors.

 

 

Bionano Genomics could even be poised for higher levels of growth going forward. Beyond its existing Saphyr system, the company is working on a prototype for a new genomic imaging system that is expected to be market-ready sometime in 2023.

 

According to early releases from Bionano, the new system will increase the speed of imaging by more than 300 percent. Once this newer system rolls out, long-term investors could be rewarded with significantly higher share prices.

 

Overall, BNGO could represent an opportunity for investors who are very comfortable with risk. Bionano Genomics is certainly speculative, but the arguments behind it are reasonably solid. If the company can continue to capitalize on the Saphyr system and market the new system expected to come online in 2023, the gains from this stock could be very high.

 

That view seems to be supported by current analyst ratings, even if there are only a handful of ratings available. If you’re sufficiently risk-tolerant and looking for large gains from an emerging biomedical technology, BNGO could be a buy.

 

Needless to say, Bionano Genomics isn’t without its risks. The volatility that the stock saw in 2021 should concern all but the most risk-tolerant investors. While there could be large profits ahead for those willing to assume the risks, those profits are far from guaranteed.

 

It’s also important to remember that the biomedical industry is crowded with potentially disruptive technologies. Even those that have serious clinical potential often end up being lackluster as stocks. While winning stocks in this field can produce outsized gains under the right circumstances, investors should also remember that more stocks are likely to ultimately end up as losers than winners.

 

Finally, Bionano Genomics has yet to prove itself on anything but a very small scale as a company. Although the Q4 report hasn’t been released yet, revenues from the first three quarters of 2021 totaled only $11 million. In order to justify a valuation closer to its 2021 highs, the company would need to massively expand its revenues in the coming year.

 

At this time, ARK does not invest in BNGO. With that said, the company does appear to have some promise in its own right. Like all speculative small-cap companies, Bionano Genomics is a risky stock to own. If the company continues to develop and market its genome imaging technology, though, it could prove to be a profitable one.

 

While institutional investors can be good bellwethers for a stock’s potential, it’s usually a bad idea to evaluate a company on that basis alone. Certainly, Bionano Genomics has some real potential as an investment. If you’re interested in purchasing BNGO stock, be sure to carefully evaluate Bionano’s investor relations documents and make sure that it’s a good fit for your portfolio.

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