Grail Stock Goes Public. Do We Sell It?

Is it finally time to dump Illumina stock? That’s a question we posed last fall while pondering whether to stay invested in a genomics leader with stagnant revenues and a horrible track record of M&A decisions. One of those was Grail, an acquisition that decimated shareholder value. Illumina was predictably forced to divest Grail and released it into the wild as a spinoff that now trades under the ticker GRAL. Today, we’re going to put our Illumina frustrations on the back burner and focus on the new shares in our portfolio that resulted from the Grail spin-off.

Why We’re Holding Grail Stock

The spin-off terms used simple math. For every six shares of Illumina held, investors were given one share of GRAL which – as of market close – is worth $15.37. This trading debut means we now have an “information statement” to review which provides us with a lots of information about Grail that we weren’t privy to before. We can then gauge the merits of Grail as an independent company and alongside Guardant for comparison.

Now that Grail is a publicly traded company, investors with no dog in the race may be wondering about whether this $500 million company merits a closer look. The thesis on offer is “cancer blood tests” and “early cancer detection,” the idea being that most cancers have dramatically higher surviv