I remember 23andMe being a hot stock at one point (it looks like peak valuations were at $7 billion with a “B” at the market top of price chart below), but here we are at around a $20 million market cap ~4-5 years after IPO. That’s an incredible amount of value change in front of our eyes in the public markets. This is a reminder that 1) stocks that aren’t holding price or under institutional accumulation should always be avoided on the long side and 2) short trades are sexy too.
On the short side, this would’ve been incredibly lucrative for the right hedge fund-style traders or short-biased investors. Market lessons like this are super valuable for future trades.
Comments/Lessons/Wisdom:
- Nice pop on IPO, but after breaking below the IPO price line (~$200 price area) it failed to truly sustain.
- Shortly after IPO, even I (being the crowd/public) felt convinced that this would go on to be a very successful company. After all, it did create a $7 billion dollar narrative momentarily.
- Over $1.1B in private funding but that doesn’t guarantee success. Definitely a nice show for the public markets and a great study on investor behavior.
- Sequoia Capital and Google were venture investors (venture investors can be wrong too)
- A lot can happen in 4-5 years and this is why we should never try to catch falling knives. Let the institutional investors do that part.
Press Release
Weekly Stock Chart
Monthly Chart
Financial Snapshot
