Twist Bioscience Corporation ($TWST) Investor Settlement

Twist Bioscience Corporation has reached a tentative settlement to resolve investor claims that it overstated the automation, quality, and profitability of its synthetic DNA and NGS tool business.

Outline:

From 2018 to 2022, Twist raised more than $1 billion while touting strong margins, automated production, low error rates, and fast turnaround. Investors say the company actually relied on manual processes, shifted production costs into R&D, and struggled with product failures, contamination, and customer complaints. On February 10, 2022, Twist completed another major stock offering, and on November 15, 2022, a short-seller report challenged its margins and manufacturing claims. $TWST fell 20% that day, and the case has now moved to a tentative settlement.

Timeline:

• October 31, 2018: Twist’s IPO registration became effective and the stock began trading on Nasdaq.

• November 2, 2018: Twist completed its IPO and raised about $80.5 million.

• January 27, 2020: Twist completed a secondary offering that raised about $50 million.

• December 2, 2020: Twist completed another offering that raised about $345 million.

• February 10, 2022: Twist completed another stock offering that raised about $287.5 million.

• November 15, 2022: Scorpion Capital published a report challenging Twist’s margins, manufacturing process, product quality, turnaround times, and customer satisfaction.

• November 15, 2022: $TWST fell 20% in one day, from $38.00 to $30.43.

Background:

Twist makes synthetic DNA and related DNA products, with synthetic DNA and NGS tools serving as the core of its business. The company told investors its DNA synthesis platform gave it a major advantage by allowing highly automated production, strong quality, fast delivery, and attractive gross margins.

Investors say the business worked very differently in practice. According to the case, Twist relied heavily on manual intervention throughout production, which increased costs and created bottlenecks, errors, and delays. The dispute also points to contamination events that shut down production and slowed shipments for weeks at a time.

The case further centers on how Twist reported profitability. Investors claim the company shifted production-related expenses into R&D instead of cost of revenue, which made gross margins appear better than they really were. At the same time, investors say Twist continued promoting low error rates, scalable infrastructure, and strong customer satisfaction.

The source also describes recurring quality problems with Twist’s products. Customers allegedly received incomplete, incorrect, contaminated, or delayed products, and the company often had to remake shipments or provide free replacements. Internally, investors say leadership pushed a “good enough is good enough” approach that favored shipping product and generating revenue over fixing production quality.

Even as those issues persisted, Twist completed multiple stock offerings and raised more than $1 billion. On November 15, 2022, a Scorpion Capital report pulled those issues together and challenged the company’s accounting, manufacturing, and product-quality claims, sending the stock sharply lower. The matter has now moved to a tentative settlement.

What Can Investors Expect Now?

Twist Bioscience Corporation has reached a tentative settlement to resolve investor claims that it overstated the automation, quality, and profitability of its synthetic DNA and NGS tool business.

If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section.