Unusual Report Of DNA Sales From Floundering 23andMe

Todd Moses
May 15, 2024

DNA-testing firm 23andMe Holding Co. has been granted an additional 180 days to move its shares above $1 to avoid being delisted.

Inputs that matter: The stock has traded below the $1 Nasdaq minimum since late last year, with the clock ticking to regain compliance. It will now have until Nov. 4.

  • U.S. Representative Jason Crow warns that bio-weapons are being made that use a target's DNA only to kill that person.
  • The Congressman said the devilment of the weapons is problematic given the popularity of DNA testing services like 23andMe.
  • In 2019, it was found that Russian and Chinese labs were processing DNA tests for Americans through Medicare and Medicaid.

The opportunity: 23andMe agreed to go public in 2021 through a merger with a special-purpose acquisition company founded by billionaire Virgin Group founder Richard Branson.

  • It was valued at $3.5 billion at the time. In just a few years, the stock has lost more than 90% of its value as the consumer DNA testing revolution the company sought has been slow to catch on.
  • Last month, CEO Anne Wojcicki said she was considering taking the company private, telling board members she is proposing to acquire the company, according to a filing.

Zoom in: Earlier this year, 23andMe was accused in a class-action lawsuit of failing to protect the privacy of customers whose personal information was exposed in a data breach that affected nearly seven million profiles last year.

  • The lawsuit, which was filed in federal court in San Francisco, also accused the company of failing to notify customers with Chinese and Ashkenazi Jewish heritage that they appeared to have been specifically targeted.
  • The suit was filed after 23andMe submitted a notification to the California Attorney General's Office that showed the company was hacked over five months, from late April 2023 through September 2023.
  • The company first disclosed the breach in a blog post on Oct. 6 in which it said that a "threat actor" had gained access to "certain accounts" by using "recycled login credentials."

Between the lines: Stolen DNA, if manipulated, can be used to create biological weapons since hackers can sell the data for gene editing, which is the process of making specific changes to DNA to develop deadly bacteria and virus strains.

  • These diseases and other genetically modified toxins can spread and infiltrate food production, water supply, and other systems that rely on biotechnology.

Follow the money: A recent X (formerly Twitter) post with 19,000 likes claimed that 23andMe was selling DNA data to China.

  • "Rothmus" an X account with over 194,000 followers, made the post.
  • While the claim could not be verified, the action alone could limit opportunities for the stock to move beyond the $1 minimum.
  • 23andMe (NASDAQ: ME) currently trades at less than $0.65.

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Read More

  1. https://www.nytimes.com/2024/01/26/business/23andme-hack-data.html
  2. https://twitter.com/Rothmus/status/1790408907828957254/photo/1
  3. https://therecord.media/scraping-incident-genetic-testing-site
  4. https://twitter.com/Couldcareless12/status/1790409502589632736
  5. https://www.thestreet.com/technology/hackers-could-use-your-stolen-dna-data-as-a-weapon
  6. https://finance.yahoo.com/news/struggling-23andme-granted-extension-revive-203645805.html