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23andMe's share price keeps on falling in the wake of hacks and losses

23andMe CEO Anne Wojcicki
23andMe CEO Anne Wojcicki.Steve Jennings/Getty Images/TechCrunch
  • 23andMe stock is down over 95% from its peak, cutting its value from $6 billion to $345 million.

  • The genetic-testing company is facing financial and strategic challenges, and was hacked last year.

  • The startup's backers, including Sequoia Capital, have taken big hits to their investments.

23andMe has gone from a Silicon Valley darling and pop-culture sensation to being shunned by investors and threatened with delisting.

The genetic-testing startup made its stock market debut in the summer of 2021 to great fanfare, and was once worth as much as $6 billion.

However, its shares have since nosedived more than 95%, leaving it valued at about $345 million.

The shares were trading at just 72 cents on Thursday, the Nasdaq exchange warned in November the company could be delisted if they remained below $1 for too long.

23andMe's main challenge is that many customers don't feel the need to take its test more than once, and few get life-changing insights from doing so, The Wall Street Journal reported in an article chronicling its rise and fall.

23andMe's problems have translated into grim financial performance. Revenues dropped by more than a fifth to $111 million in the six months to November, pushing up operating losses by a similar amount to $188 million, its latest earnings report shows.

Its cash reserves also shrunk by a third to $256 million between March and September last year.

CEO Anne Wojcicki has tried to slow the cash burn by making layoffs and selling subsidiaries, as well as revitalizing growth by pivoting to subscriptions and offering a wider range of healthcare services.

Yet the company only had 640,000 subscribers as of March last year — less than half what it once expected at that point, the Journal reported.

23andMe has also struggled to find investors to partner with on new initiatives like drug development.

That may be in part because its existing backers have taken a beating: Sequoia Capital has seen the value of its stake drop from $145 million to under $20 million, according to the newspaper. Sharp increases in interest rates over the past couple of years haven't helped either.

Meanwhile, hackers stole the data of nearly 7 million customers, and the company only found out five months after the May breach. Between 23andMe's growing pains, financial challenges, and bad press, it's perhaps little wonder the stock has tanked.

23andMe didn't immediately respond to a request for comment from Business Insider.

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