Gene jitters
DNA drama at 23andme
Good morning, molecular magicians. This is your Stock Market Rundown for August 9th, 2024. Thanks for tuning in today. Let’s get into it:
TODAY’S TOP STORY: ANNE WOJCICKI’S GENOME GAMBLE
Do you know where you come from? A decade ago, your knowledge of your ancestry was based on what your parents told you—and maybe squinting at faded photos in a family album.
But the launch of 23andme let consumers to discover their genetic legacy—down to the decimal place. Founded in 2006 by molecular biologist Anne Wojcicki, 23andme introduced a home DNA test that lets customers provide a saliva sample and get a full report on their ethnic makeup.
Wojcicki’s aspiration was to eventually use 23andme’s vast DNA database to discover new drugs. Soon, everybody was buying each other 23andme tests as Christmas presents. (Since 23andme also lets consumers tick a box on their tests to scan its database for relatives, this led to some Maury Povich-tier revelations.)
23andme went public in 2021, but never came up with a business model that turned a profit. Its biggest problem? Zero repeat business. Once you know the pie chart of your ancestry—”wow, 2.2% Sub-Saharan African!”—you’ve basically unlocked all the secrets your genome has to offer.
By 2023, 23andme’s losses were swelling, and management slashed staff to reduce cash burn. But the stock has been decimated—it’s now in danger of being delisted. The company’s market cap has shrunk from a peak of $6 billion in 2021, to sub $200 million.
Now, founder and CEO Wojcicki has made an opportunistic proffer to the board to take the company private. It’s a move to grab control on the cheap so she can try to turn things around. Wojcicki cracked the code of our DNA—now she has to crack the code of how to actually make money off it.
SO WHAT ELSE IS GOING ON?
Meta (parent company of Facebook) is introducing a tool that will let users create personalized AI chatbots. Idea: have your chatbot argue with the phone company until they give you a discount on your monthly bill.
Snapchat’s profits are vanishing quicker than a spicy snap sent to your crush. The company's quarterly results fell short of expectations as ad spending slumped.
Who doesn’t love the smell of gasoline in the morning? Exxon’s quarterly profits beat expectations thanks to global oil demand hitting record levels.
Match, the company that owns Tinder, is slashing headcount to adjust to a slump in paying users. Guess all the singles joined running clubs to meet their next boo.
That’s everything I’ve got for today, folks; I anticipate the pleasure of your company next week. Yours in capitalism, The Axe
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