23andMe, one of the largest consumer DNA testing companies, has declared Chapter 11 bankruptcy protection in the United States. This comes on the heels of a major cyberattack in 2023 that exposed the data of almost 7 million customers. The breach exposed sensitive information, including users' genetic predisposition and ancestry reports, significantly impacting the company's reputation and financial standing. So far, 23andMe’s market capitalization has fallen by more than 99% from its high. As of this writing it’s down to about $48 million, with the stock recently trading at a paltry $1.79.
The cumulative effect of all these obstacles has made it difficult for the company to turn a profit. By September 2024, 23andMe had reached a settlement with the plaintiffs over the data breach, agreeing to pay a total of $30 million. This legal resolution was followed closely by the announcement of co-founder and CEO Anne Wojcicki’s resignation from the company. Wojcicki’s announcement that she might pursue a solo bid for the company’s assets came on the heels of her initial interest.
“The 23andMe Special Committee released news today indicating their plan to take the company through the Chapter 11 process. While I am disappointed that we have come to this conclusion and my bid was rejected, I am supportive of the company, and I intend to be a bidder. I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder,” said Anne Wojcicki.
Mark Jensen, chair and member of the Special Committee of the Board of Directors announced a major step in the right direction. After deliberation, the committee made the strenuous decision to seek chapter 11 protection and start the asset selling process with the Chapter 11 process.
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business,” remarked Mark Jensen.
The cyberattack and resulting financial storm has put 23andMe in a tight spot. The firm has since sunk from a market cap of $6 billion to its current worth of. This dramatic decrease underscores the consistent and intense way in which the data breach has affected its operations.