Sohn Jung-ui Faces Bankruptcy of $1.26 Billion Investment Company

Quoting a well-informed source, the Wall Street Journal (WSJ) reported that NVTA, a gene therapy company in which SoftBank’s Chairman Masayoshi Son of Japan has invested $1.2 billion is preparing to file for bankruptcy.

According to the report, NVTA, headquartered in San Francisco is considering strategic options including bankruptcy, to resolve $1.5 billion in debt within weeks. The company is working with restructuring specialists Moelis, FTI Consulting and law firm Kirkland & Ellis.

NVTA was a popular biotech firm, attracting investment from ARK Investment, well-known in Korea for “Money Tree Sister” Cathy Wood.

The company’s market capitalization surpassed $7 billion in 2020 and its share price was over $50. However, the stock price fell below $1 with the company’s decline, and on the day the news of bankruptcy preparation was released, it plummeted to 9 cents.

Wood said that the company is considered to be the most important one from the aspect of the genetic revolution and has rated its stock as one of the most undervalued shares in her portfolio.

The downfall of NVTA recalls the bankruptcy of its rival 23andMe. The market cap of 23andMe reached $6 billion in 2021, but now it is close to “0”.

In 2021, NVTA raised $1.2 billion from SoftBank in the form of convertible bonds and the company stated at the time that the funds would primarily be used for corporate acquisitions.

SoftBank remains an investor in NVTA.

NVTA declined to comment on the matter, and neither SoftBank nor ARK responded.

In recent years, NVTA, which has aggressively pursued mergers and acquisitions to grow its size, has started to sell off some assets and reduce costs.

In January, it sold its reproductive health business for $52.5 million, and in December of last year, it sold patient data company Ciitizen although the sale price was not disclosed.

NVTA had acquired Ciitizen for $325 million in 2021.

Since its founding in 2013, NVTA has never turned a profit and is estimated to have depleted more than $220 million in cash last year.