A recent IPO bought by Cathie Wood's Ark Invest just tanked 77% after it said product 'issues' will lead to little revenue this year and next

• Shares of Zymergen plunged as much as 77% on Wednesday after the company disclosed "issues" with its product.
• The recent IPO, which was bought by Cathie Wood's Ark Invest, said it no longer expects revenue this year or next.
• Zymergen's CEO Josh Hoffman stepped down from the company.
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Zymergen, a synthetic biology company that completed its IPO in April, plunged as much as 77% on Wednesday after the company said that product "issues" will lead to little revenue being generated for the foreseeable future.

The company said in a statement on Tuesday that it became aware of issues with its commercial product pipeline that will impact Zymergen's delivery timeline and revenue projections. Zymergen is working to develop Hyaline, which enables flexible display applications for screens and devices.

"Several key target customers encountered technical issues in implementing Hyaline into their manufacturing processes," Zymergen said, adding that while it made progress addressing the challenges, there will be a delay in the company's commercial ramp.

Additionally, Zymergen said the total addressable market for foldable display applications is growing at a slower pace than anticipated, resulting in lower sales forecasts for the company.

Zymergen no longer expects to generate product revenue in 2021, and said any revenue generated in 2022 would be "immaterial."

Cathie Wood's Ark Invest is feeling the pain on Wednesday. The Ark Genomic Revolution ETF owned just over 1 million shares of Zymergen as of Wednesday, leading to a loss of more than $26 million. Ark had built its position in the company throughout late April and early May, according to its daily trade updates.

Despite the loss in Zymergen, the Ark Genomic Revolution ETF was up about 0.50% in Wednesday trades.