23andMe, the direct-to-consumer genetic-testing company headquartered in Sunnyvale, California, popped on its stock market debut Thursday.
The company is the latest to go public through a special purpose acquisitions company, or SPAC. The deal closed last week ahead of its Nasdaq listing. Other companies undergoing SPAC mergers this year include online lending platform SoFi, communal office-space company WeWork, and scooter-rental company Bird.
Shares of 23andMe Holding Co. opened at $11.13 apiece, rising 20% to a peak of more than $13 as of midday Thursday. It’s trading under the ticker symbol ME.
Founded in 2006, the company offers customers a full report of their genetic data and predispositions to a variety of health issues—ranging from the mild to the super-scary, including lupus, Alzheimer’s disease, and Huntington’s disease—all extracted from a few drops of saliva. While genetic-testing companies have proliferated over the past 15 years, 23andMe was a pioneer in the field, with Time magazine naming it the invention of the year in 2008.
However, it was not without controversy, prompting debate about whether its results could lead to genetic discrimination. In addition, privacy concerns were raised over the fact that an independent company now owns the genetic data of what has grown to millions of customers, which it has in the past shared with one of its backers, global pharmaceutical company GlaxoSmithKline, for use in developing medicine. While some see the treasure trove of data as a potential revolution in healthcare, others worry that it’s a slippery slope. In recent years, the explosion of direct-to-consumer genetic-testing companies has had a number of unintended consequences, from unearthing buried family secrets to solving decades-old cold cases.
As worries have grown, 23andMe’s success has dimmed somewhat in recent years, with the company shedding 14% of its staff in January 2020 amid a slowdown in sales of test kits. It has posted a string of net losses over the past years.
The company said it will invest the capital from the deal into its health and therapeutics arm.