Jul 23, 2021
[3 min Read]
In this analysis I'm going to look at Soaring Eagle Acquisition Corp and talk about why I think it's a solid investment. I will provide a price forecast and share price prediction, along with a timeframe
You are probably asking questions like Is "Soaring Eagle Acquisition Corp" a good investment? Or Should I trade "SRNG" stock today?". Well, I'm going to answer those questions and provide the due diligence analysis of Soaring Eagle Acquisition Corp.
Let's cut to the chase - In the near term I see the SRNG stock price going to $15 / share over the next 6~12 months. In the long term the stock price in 2025 could be upwards of $50 per share. This is based on the market opportunity and projected revenue provide by SRNG and Ginkgo.
SRNG is planning on taking Ginkgo Bioworks public. SRNG assigned Ginkgo a pro forma EV (enterprise value) of $15.2 billion and an equity value of $17.8 billion. Based on this EV and Ginkgo's projected sales, its valuation multiples for 2021 and 2022 are 101.3x and 86.9x, respectively. The company's 2025 EV-to-sales multiple of 13.8x looks attractive.
In its Feb. 2021 IPO, the SRNG SPAC offered 150 million shares for $10 each. SRNG was launched by SPAC veteran Jeff Sagansky and former MGM CEO Harry Sloan.
On Jun. 24, Sagansky and Sloan formed their eighth SPAC, Spinning Eagle Acquisition. The blank-check company filed with the SEC to raise $2 billion in an IPO. Sagansky and Sloan have already taken Skillz and DraftKings public. Ginko News
They have a strong history of brining companies public and doing well. Let's jump into some background about Ginkgo Bioworks
BUILDING WITH BIOLOGY - What if we could grow everything?
Nature offers tantalizing examples of the magical properties of biology—self-assembly, self-repair, self-replication and more. But perhaps the most astonishing feature of biology is that it runs on digital code in the form of DNA, which makes it possible for us to imagine building such living machines. The code is made up of A's, T's ,C's, and G's, and we can read and write it to program cells like we program computers.
Form 425 - Interview with Jason Kelly CEO of Ginkgo Bioworks
“And so, as I look forward, the industries that are gonna be disrupted are all the physical goods industries, right? It's things like food, it's pharmaceuticals; but it's also electronics and building materials, right? All the stuff around us. Ultimately, those are biotech industries. They just don't realize it yet. That's sort of the long-term potential of synthetic biology.”
The potential here is huge. If you have time check out the detailed interview with Jason Kelly
Here has some stats on the market opportunity for SRNG and Ginkgo
The investor presentation for Ginkgo is provided in the sourre here Source
Until the merger is finalized the Ginkgo Bioworks becomes public the SRNG Stock Price will remain around the $10 / share price, but I sense that in the near term we could see this go to $14 per share quickly. The market opportunity is huge for the next 5 years, and we will really see Ginkgo take off through SRNG.
Let me know your thoughts. Do you think this is a realistic price target for SRNG in the near and long term?