23andMe Bankrupt!

Chris dissects 23andMe’s bankruptcy—great concept, no repeat business. Once valued at $6B, it’s now a cautionary tale: one-off DNA tests don’t sustain a company. Wall Street cashed in, but the well’s dry. Protect your data! www.watchdogonwallstreet.com

Episode Transcript

Speaker 1 (00:00):
The Watchdog on Wall Street podcast explaining the news coming
out of the complex worlds of finance, economics, and politics
and the impact it we'll have on everyday Americans. Author,
investment banker, consumer advocate, analyst, and trader Chris Markowski.

Speaker 2 (00:16):
Yeah, we told you this is going to happen. Twenty
three in Me declares bankruptcy. This is a pretty good lesson.
You can learn a lot all your younger people out there.
You can learn a lot about business from this company.
And we're talking about business. There're different types of businesses.
Twenty three and me. I'm not going to argue great concept,

(00:44):
great concept, great idea, but as far as a long
term business was concerned, no, no, why okay? Twenty three
in me collecting DNA from people and uh, you know,
I stories people finding long lost brothers, sisters, all sorts

(01:08):
of other things, collects all this that, and now again
I would never, ever, again I'm giving anybody my DNA.
It's not gonna do it. I'm not gonna do it.
I'm sure that it's been collected here, there or somewhere.
But listen, okay, you know the last James Bond movie
where they were creating you know, essentially bioweapons based upon
your DNA. Nah, not not my bag. But anyway, I'm

(01:32):
sure many people just like me. Wow, it's an interesting
idea in concept, but I'm not gonna do it. But
many people did. Many people did, and you know, money
flowed into the company. The problem is the problem is
there's no repeat business. Let's let's start with this. What

(01:57):
what you know? What if what if people only went
to McDonald's once. Yeah, McDonald's would eventually go under. But no, no, no, no, no,
people need to keep going back to McDonald's. People do
not need to keep going back to twenty three. In me,

(02:17):
it's almost like kind of owning. You want to think
of it, like the clampets from the Beverly Hillbillies. Okay,
they got themselves a well they made remember the oil
well they strung oil, Okay, and they had oil well.
But eventually, eventually that well is going to run dry again.
Everybody needs oil. But unless you develop and find more wells,

(02:42):
guess what, you're going to go under. That's why oil
companies do that. Twenty three In me, that that's it.
They tried to say that they were going to use
the various different DNA samples to start some sort of
pharmaceutical company. And you know, that was the argument that
was presented to me. And I'm like, yeah, I know

(03:05):
a little bit about biotech and the type the costs
that are involved with actually developing drugs is astro freakonomical. Okay,
there's no way, no how they'd be able to afford
to do that. They would have to raise a ton

(03:26):
of money, bring in all sorts of experts. They didn't
have the infrastructure to do that. So no, that was,
you know, no way, no how, not going to happen.
This twenty three and meters and the company going public
was again another example of Wall Street ripping people off.

(03:47):
Don't won't tell me that the people in the on
Wall Street did know that that was this. You know,
what I just presented to you wasn't the case. But
they don't care. They don't care. They're they're you know, oh,
everybody's doing it. We could sell this stock, and that's
what they did, and you bought it. Again. I've often

(04:08):
talked about that demonic game of musical chairs that so
many people like to play. We don't play. There's no
point in it. We knew what was eventually going to happen.
It wasn't a matter of if, it was a matter
of when. Anyway, I guess now again then this is

(04:30):
if you sent your DNA in, you might want to,
you might want to, I don't know, get hold of
a company. I guess there's some option that they get
rid of your information at some point in time, because
this is going to a bankruptcy sale, and you don't know,
some some private equity company is going to end up
with your DNA sample at some point in time unless

(04:51):
you get rid of it. Just saying again, you have
to take a look at companies in a different way.
If the you know this, the CEO of the company
that stepped down, what's her name, WIJICKI w O J
C I c K I again, great idea, great idea,

(05:13):
could have made herself. Unfortunately, she did make herself a fortune.
I mean obviously blew out of her stock when the
thing went up. Certain businesses, certain businesses have a lifespan,
and twenty three and meters was one of them. Watchdog
on Wall Street dot Com