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Zymergen announced that CEO Josh Hoffman has stepped down and will be replaced by Jay Flatley as the acting Chief Executive Officer.
Zymergen Inc (NASDAQ: ZY) stock was down as much as 73.90% during today’s pre-market. According to metrics provided by MarketWatch, ZY stock traded around $9.80 as of August 4, 2021, 6:32 a.m. EDT. The sharp nosedive has directly been attributed to a business update provided by the company.
Notably, the bio-based product company announced that it expects no product revenue in 2021. Further, the company said that product revenue in 2022 will be immaterial. To add to it, Zymergen announced that CEO Josh Hoffman has stepped down and will be replaced by Jay Flatley as the acting Chief Executive Officer.
“We are disappointed by these developments, and the Board and management team are focused on resolving the underlying issues to ensure Zymergen moves forward as a stronger company with a compelling operating plan,” said Flatley.
Additionally, Flatley noted that the company has formed dedicated committees to swiftly look into the internal operations.
“The underlying premise of our business and technology is sound, and I am proud of the work our teams are doing across the organization. We are confident in Zymergen’s opportunities and prospects, although it will take longer to accomplish our goals than previously expected,” he concluded.
The company encountered notable challenges during the second quarter and thus did not meet the desired results. Zymergen currently relies on a product called Hyaline. However, the company noted that it experienced notable challenges in the manufacturing process. Moreso, the market has not responded positively to the Hyaline product as forecasted.
As of the moment, the company is evaluating its market target and also its products in the pipeline to provide reliable information based on facts to investors. However, the damage has already been caused.
Zymergen Stock and Market Outlook
Zymergen went public earlier this year around April, whereby its shares debuted at $31 per share. In the days following the IPO, ZY stock shot as high as $52 with its market capitalization rising to over $4.8 billion according to MarketWatch.
However, the company’s valuation has dropped to as low as $3.41 billion as of reporting time. Despite its shares have dropped approximately 25%, and 10% in the past three months and one month respectively, a survey conducted by MarketWatch indicates 7 ratings having given ZY stock an average of a Buy rating.
The rating is, however, subject to change after the company announced the negative news that will impact its revenues in the coming two years.