23andMe to merge with VG Acquisition Corp. to become publicly-traded company | Hacker News Reader

23andMe to merge with VG Acquisition Corp. to become publicly-traded company

mediacenter.23andme.com

129 pointsbreck169 comments

I think too many people don't understand that the $VGAC shareholders only get 11 % of 23andMe. At 19 USD that's a valuation of nearly 8 billion and completely overvalued - I wrote a blog post about this: https://blog.m5e.de/post/on-the-23andme-and-vgac-merger/

Genetic testing used to be very expensive: $3B to sequence the human genome. So Ancestry/23/etc. tried to guess certain properties based on very sparse features of your genome, which is hard. But today, whole genome sequencing cost is approaching $100. This cost reduction will upend this industry, in my opinion.

That's not the point.

The point is: at 19 USD per share you nearly buy at a valuation (8 billion) at which the institutional investors bought Ancestry ($4.7 billion) and 23andMe ($3.5 billion)

Also: 23andMe had declining revenue in the past years and does only make around 200 million revenue.

You buy a business at a valuation at 8 billion which makes only around 200 million revenue.

I'm assuming they're going to try to start monetizing the data they've collected, not that they expect people to keep paying for more and more tests. I wouldn't read too much into the revenue that the old model generated.

(People complain that Facebook etc have become big and powerful by sucking up all your data, but at least Zuck didn't charge you for the data.)

It's a good point. I'm just saying that this coming tech revolution is another issue to consider.

The cheapest WGS I can find for consumers is $299 (30x WGS from Nebula). Do you know a cheaper alternative? I'd much rather get a whole genome that I can download rather than the handful of little snips from 23 and me... At $100 I would buy in a sec. Would be a nice motivator for bioinformatics hobby/learning projects too.

I saw ads for $149/sample. Probably not available to consumers yet. But the general trend is precipitous decline (10000000x)

Doh! Thank you for the tip. I'll be honest, I was a little confused by the ~$1B market cap, but I did buy VGAC thinking I was getting a slice of 23andMe at a ~3.5B market cap, because that's how the press release made it sound.

In the future it would be nice if SPACs and the companies made that dead simple. I don't think this is something that needs to be regulated though. From the events this month I think we just need to allow the public to invest in whatever, abolish copyrights (which allow lies to flourish and buries the truth), and let the market figure it out.

Why would a company go through a SPAC instead of an IPO?

Does the SPAC merger constitute a hedge against uncertainty in an IPO? What I mean is, 23andMe gets cash NOW and the SPAC gets the company at a discount but accepts the risk the IPO might not meet its goals?

Could someone please explain the strategy?

In addition to speed and guaranteed price a SPAC merger also has less reporting requirements, because the SPAC already did go trough the IPO paperwork when it was created. And didn't have to explain weird things about the business to investors because it had no history or things to be going on. It then can relatively easily buy 23andMe, and 23andMe doesn't have to explain its business risks etc to the public as much - which could have been an issue and risk to the stock price given the history of probes about medical claims etc.

Am I the only one who thinks that's a massive hole in the rules? You IPO an empty shell, which passes easily because it does nothing, and then any old shop with a messy business can then be bought by it?

I wouldn't consider it a hole in the rules, it's more of an alternative listing method.

In my view, nothing materially changes. If 23andMe is a turd then an IPO through Goldman or JPMorgan isn't going to really change that, and neither will an SPAC.

Although it's a little bit "gambling" because you don't know what the SPAC acquisition will be ahead of time, I think the SPAC vehicle is great for retail investors. If you take IPOE and SoFi for example, you could have bought Social Capital Hedosophia's IPOE SPAC at $13/share or something and watched it grow once the shares were slated to be turned into SoFi shares. But in the traditional IPO process, well, you get to buy the SoFi shares at the IPO price. If you have a high net worth, that's probably fine. But if you're a retail investor - well, look at AirBnB's IPO price at $68/share and what you could actually get it at on IPO which was closer to $140 or something.

In other words, you get a little bit of exposure to the game, and of course a little bit of exposure to the risk as well which is "I don't know who they will merge with".

What? At least as described above, the material requirements for disclosures changes. Is the description above wrong or do you not find disclosures to public market investors to be material?

I don't think they're material. The IPO prospectus for companies is a sales pitch with a bunch of legal "we may never make money" comments. If you commit fraud you'll wind up in court, disclosures or otherwise. Oh and nobody reads any of these documents, let alone any quarterly numbers.

I think SPACs are certainly a more risky way to put your money to work, but they're fine.

Companies that don't make money, have never made money, and to my eyes have absolutely no path to profitability IPO too - the banks just like to collect fees to get you to the public market. Does it really matter if they do it through an SPAC? I don't think it does.

I disagree in the importance of an S-1 disclosure. Detailing the actual business plan of the company, as to what people think the plan is, was invaluable for WeWork. Uber's quarterly earnings are a continual source of entertainment. I personally wouldn't put any money into a public company before an actual SEC-required statement, and an SPAC bypasses the first.

I think it depends on what we're talking about, right? My suggestion is that largely nobody cares or looks at these disclosures, not that they aren't important. I think institutional investors probably do, but they're certainly willing to invest in SPACs as well, it's not like it's only retail investors who buy shares of SPACs.

Your point about the business plan is interesting... it depends on the perceptions that investors have that the company can achieve a business plan, but it's not necessarily accurate right? Uber was going to do all this autonomous taxi stuff, and had it outlined in their business plan. WeWork was punished for having a crappy business plan before it filed, Uber has a crappy one (or at least one that turned out to be crappy in my opinion) and went public anyway. The disclosures certainly didn't help much - they aren't a guarantee. Things like Adam Neumann leasing his own properties to WeWork came out before any of these disclosures. If WeWork went the SPAC route (and it actually looks like it will at a $10bn or so valuation), it's not like you really hide all that stuff any more than you hide it in the normal IPO process.

If you don't like that Social Capital Hedosophia is taking SoFi public via IPOE SPAC, you can dump your shares. It's not like you have to hold the shares. It's a speculative position to take. Hell, at least you can actually dump the shares before the listing even happens - for IPOs there can be lockup periods where you wind up losing money because the IPO was way overpriced. Banks get their fees either way (which is fine).

So in other words, a SPAC is “a company for carrying out an undertaking of great advantage, but nobody to know what it is”?

https://en.m.wikipedia.org/wiki/South_Sea_Company#Top_reache...

It was apocryphal during that bubble; it’s real now. I do not find that to be a good thing...

Once the SPAC has identified a company to buy, investors in the SPAC get a choice to either stay invested or get their money back with interest. So it's only a blank check initially, but not once it matters. Source: https://www.bloomberg.com/opinion/articles/2021-01-08/spac-m...

My understanding was that SPAC shares came with a warrant that could be exercised for shares in the acquisition target, rather than transmuted directly into shares. After the management fee, market premium and exercise cost are you really coming out ahead? Am I misunderstanding the mechanics?

No, you're not coming out ahead. You're roughly paying a 20% cost of capital. In today's frothy markets, you might make up for that in the public markets, but it does seem that mostly second tier companies are going public through SPACs.

Depends on the SPAC and the target company.

>alternative listing method

I know porn when I see it, and this is a flashing neon sign that reads "get in on our definitely not fraudulent spacs here to absolutely not lose money to the institutional investors juicing a most assuredly not failing business"

The company I work at, which shall remain nameless, is going through or went through this SPAC process, and we're assuredly growing and have good fundamentals, so it's not _just_ a parlor trick for Wall Street, but _some_ of them probably are.

Check out The China Hustle for a great documentary on this topic: https://www.rottentomatoes.com/m/the_china_hustle

It's currently streaming on Hulu and Amazon Prime Video.

On top of this, SPACs usually have private PIPE investors who get shares at the "IPO" price, typically 10 dollars, while people who buy the public SPAC shares typically have to pay twice that, which feels super scammy.

https://www.investopedia.com/terms/p/pipe.asp

That sounds a bit like claiming that it's scamy a company founder gets a higher salary than future employees. Of cause the company is allowed to raise money anyway it sees fit, including providing discount for individual investors for any given reason. If you don't like how they are carrying out their business you can just not invest. Which you might be leaning towards, which is why if you where a potential big investor they might offer you a discount to get you onboard as well.

Why? Earlier investors always get better prices before opening to the public, in exchange for helping the company go public.

Pipe != Early

https://www.investopedia.com/terms/p/pipe-deal.asp

Yes, that's pretty much the idea.

Back in markets, we would of called it 'regulatory arbitrage.'

Why doesn't every IPO happen this way? Once you want to go public, you make a SPAC, get that approved, then have it buy your business?

The sponsors of the SPAC set aside for themselves a big chunk of the shares of the newly combined entity. So in general, the company gets a worse price than it would if it had gone public via an IPO.

So if the principals involved in a startup set up their own SPAC to take the company public, they could screw minority shareholders in the original company like, say, employees?

The laws generally require that these things be “arms length transactions”, basically meaning that the two parties are legitimately at odds over the price. Your example would not be that.

Most sponsors don't hold shares unless for the stock pops way beyond the $10. For the average company, you may end up as a public company with no cash raised. This can be mitigated by a concurrent PIPE, but otherwise you're SOL.

Right now it kind of seems like every IPO does happen this way. There's kind of a SPAC mania going on. I can name at least 5 companies that are going public through SPACs, and two more that are rumored to be doing the same soon (Virgin Orbit and Lucid Motors).

What I mean is why don't traditional businesses IPO in this way? If it's a pain to do due dilly with a real business, why isn't this a back door?

Theoretically, you get a lower price with an SPAC. However, if so much money is looking for returns, then the price might not be so low as to discourage it compared to other traditional ways to IPO.

SPAC acquisitions raise significantly less money for the target acquired company, so generally a target only goes the SPAC route if their financials aren't in good enough shape to go the traditional IPO route (offering, dutch auction, or otherwise).

Most SPAC acquisitions involve high-risk companies, for recent examples: Lucid (10 years on and still no actual product for sale), Nikola (fraud), 23andMe (its financials are reportedly not in great shape), Opendoor (huge portfolio of risky real properties), EVgo (history of massive losses), Clover Health (accusations of fraud, under DOJ investigation).

SoFi is the only company I can think of that is going the SPAC route that was potentially in the shape to IPO (their potential IPO was tenatively valued at $17 billion at the start of 2020, but the SPAC acquired them for around 8.65 billion). They apparently chose not to IPO because they wanted "deal certainty." However, leaving that much money on the table is a huge red flag for a financial company; it suggests that 2020 was a bad year for them and that they wanted to avoid disclosure, or that their financials are not in great shape.

If you’re investing in an SPAC, you should know this already. Everything is transparent, so I don’t see what the loophole is, or who or how anyone is getting bamboozled?

Company wants to go public with higher guarantee of price, they go with SPAC. Investor wants higher return, they invest in SPAC, but there is no higher return without higher risk.

No you're not. It's entirely a loophole being regularly exploited.

Now whether the existing IPO requirements could/should be streamlined is another question.

That’s why everyone is riding the gravy train as fast as possible

No you're not the only one, it is a massive loophole that benefits corporations and the perfect example of why government regulation can never really work in the end. There will always be a way around found.

The company gets to go public without having to immediately provide all the materials for due diligence for public investors. The companies shares get peddled to the general public and the SPAC investors and the company both win. The public is left holding the bag.

Wow that seems like the kind of behaviour you'd see in a massive speculative bubble.

People buying blank cheque companies without knowing what they're going to get.

I'm not sure I buy that - you're only likely to find out it was a bad idea after the takeover, because the deal is deliberately opaque, early investors get special rights, it may only be for a small part of the private company's value, and the private company has not usually published all the data required of a public company.

There are very good reasons IPOs require all sorts of public documentation and due diligence. All that regulation which SPACs attempt to side-step is there because of previous scams run in just the same style as SPACs.

They are reminiscent of the weird companies formed during the South Sea Bubble e.g. A company for carrying on an undertaking of great advantage but no-one to know what it is

If you don’t like what the SPAC is going to do then you can get your money back before it’s used in the acquisition.

Don't forget skimping out on the fees and money left on the table when dealing with a traditional investment bank.

SPACs acquire targets for significantly less than the potential IPO price, and their are still fees and deal costs associated with the merger, so from the target's perspective, you still end up with less than you would with a traditional IPO even after the fees of a traditional investment bank.

So why would a company ever go the SPAC route? SPACs are all about avoiding the (financial) disclosure required for a company going public the traditional way, and if you take a look at the list of companies getting acquired by SPACs this year, every single one of them has a red flag that would make their IPO risky (see, e.g., We).

There is direct listing (DPO). Spotify and Slack did that.

> Does the SPAC merger constitute a hedge against uncertainty in an IPO?

Yes, that's exactly right. You're basically paying for certainty.

Matt Levine has the best ELI5 on this subject that I've seen:

https://www.bloomberg.com/opinion/articles/2021-01-08/spac-m...

Here's the high-level summary from that article, though there's a lot more detail that's worth digging into:

> Here’s how a SPAC works:

1. You give me $10.

2. I put your $10 in a pool with a bunch of other people’s $10, held in a trust account at a bank.

3. I give you back one share in the pool (representing $10 of money in the pool), and one-quarter of a warrant to buy another share for $11.50. (The combination of the share and part of a warrant is sometimes called a “unit.”)

4. I try to find a company to take public within two years.

5. If I fail, I give you back your $10 with interest.

6. If I succeed, I merge the pool with the company, giving the company the money in the pool and giving you and your fellow shareholders shares (and warrants) in the new combined company. Also I get a bunch of shares and warrants in the combined company, as a reward for my work.

7. When I do this, I give you the choice to either (a) let your money ride and take a share in the new company or (b) get your $10 back, with interest.

I don't see anything especially wrong with them and what they do because they're really just a way around the IPO paperwork and restrictions. Usually, a lot of that feels like a formality, but it did surface some interesting things about Wework. That said, it's a bet on the team, and you have no idea what they're going to find. It's a little like investing in a less-diversified, late-stage venture fund.

>they're really just a way around the IPO paperwork and restrictions

Is this really where we are at?

>Usually, a lot of that feels like a formality, but it did surface some interesting things about Wework.

WeWork was one in a long list of these jackpots.

The investing public loses out on valuable information. It's an end-run around disclosures.

That's not a good thing.

Can the general public invest in SPACs? Are there SPACs that target specific markets, like tech, finance, real-estate, etc?

> Can the general public invest in SPACs

Yes. I'm pretty sure the ticker symbol of this one is VGAC.

The problem you get is this: https://vgacquisition.com/objective/

> VG Acquisition Corp (VGAC) aims to invest in a strong business with a proven track record that can deliver attractive returns to public market investors by capitalizing on Virgin’s brand and global resources.

I'm sure some target specific markets, but this one doesn't.

https://spactrack.net/activespacs/

The major benefit of going public via an SPAC is avoiding the onerous disclosure requirements associated with an IPO. In particular, the SEC frowns upon projections of imminent, wild growth, which is a big part of the valuation of many companies seeking to go public these days.

With an SPAC, a company can go public while still hyping the stock on YouTube or whatever, and without suffering a lockup period during which its executives are not allowed to sell into the mania. The SPAC phenomenon why have suddenly seen so many overhyped companies (NKLA, anyone?) in the public markets lately.

23andMe gets to IPO immediately without having to go through a lot of the regulatory work that would normally happen in a direct listing because the SPAC acquiring them is already public. This means they can get a good percentage of the normal cash infusion with half the hassle.

Those creating the SPAC get a discounted price on the stock they eventually take public, but for the bill via increased risk they might not get a good company.

Th last twenty Bloomberg Money Stuff [1] columns get into the details of SPAC vs IPO. Matt Levine does a pretty good job explaining finance stuff to non-finance people.

[1] https://www.bloomberg.com/opinion/authors/ARbTQlRLRjE/matthe...

One factor is predictability in initial price. The SPAC & company negotiate a fixed price to go public. With an IPO the company begins the process with a valuation in mind but a lot of it still comes down to the roadshow investors, for better or worse.

>Why would a company go through a SPAC instead of an IPO?

Less regulation and disclosure. Don't let anyone tell you differently.

I believe a SPAC might be cheaper and has less obligations before "going public" that an IPO.

so they can continue to hide from public that most of their revenue is from secondary use they monetize from their database: research & law enforcement (or anyone that wants to buy their anonymized database, that still seem to contain zipcode)

Here's a thread of basic diligence on the company:

https://twitter.com/BluthCapital/status/1357469113422069761?...

Possibly of interest if you're considering investing.

Thanks! It does explain why the stock price is low.

I do have some problems with 23andme (and I've sent Anne a few emails about things over the years about a few simple things that they still haven't corrected, which is a bit worrisome), but that being said, who else comes close to doing what they do?

I invested a lot in FitBit (lost a lot), but also Garmin and AAPL and MSFT (I just liked the wearable sector).

Similarly, I'd like to do a similar play in consumer genomics. Just bought some 23andMe (via the SPAC, not sure if I did it right), but what else is out there? I liked uBiome but not sure what is happening there. Ancestry.com I should probably look into, what else? Oxford Nanopore would be great (are they public?).

23andme is great because of the network effects. If someone comes out with better sequencing tech, they still have a huge distribution problem, which 23andme has solved (if they don't blow the trust of their users).

Anyway, I'm long.

I don't know the space well, but I have been in a position to have purchased a few (IIRC at least 4) genetic tests used in clinical diagnoses. 23andMe was not a vendor that was used in any of those situations. Also, those tests cost a lot more than 23andMe's tests (this can be good if you are an investor).

Even if you suspect something based on a 23&M test, your doctor will likely require confirmation from a clinical testing company. That's IMHO where the money is. 23&me is analogous to the over-the-counter tests they sell in the drugstore, which we know are a cheaper alternative than a "real" lab test.

> who else comes close to doing what they do?

The other vendors in the space who are used in clinical environments ("real" lab tests). Think Lab Corp (LH) as an example. You might also look at the constituents of the ARKG ETF for other options. These are companies that have demand locked in through relationships with healthcare providers and are also able to charge more for their tests.

None of this is investment advice. Obviously you should not take investment advice from strangers on the Internet.

Yeah Lab Corp and all them work a lot on the supply side, but last mile consumer experience is awful. I think it's equally as hard to perfect that last mile consumer UX and distribution challenge, and probably more valuable long run (if you own the customer relationship, you have a lot of leverage to negotiate prices with vendors, and swap them out lego lego pieces, a la Apple).

Not to say that 23andMe will be the Apple of the space (and realistically Apple with Apple Health has a good shot at it), but I definitely don't think anyone wasting time with the B2B businesses will be the big gorilla in 10 - 20 years, and instead it will be a consumer facing company like 23andMe or someone.

> last mile consumer experience is awful

Interesting perspective. When we used labs similar to LabCorp in the past, the last mile was our physician (who we like!). I'm curious what part of the last mile is negative with traditional labs?

> if you own the customer relationship

I'm not sure any testing provider is ever going to be in a position to own the customer relationship. The physician and healthcare team will by definition always be closer to the customer.

Also I should have noted above: I don't have to worry about Lab Corp or my doctor selling my health information due to HIPAA compliance. That may be generational; perhaps younger generations will not care about this aspect of privacy.

> I'm curious what part of the last mile is negative > with traditional labs?

Well for one, why do I even have to go a mile? I've spent some time on the bench. All of this stuff will eventually be done at home (won't even need to mail in things!).

Last February when I got COVID I couldn't get a test because "I hadn't been to China". But they tested me for perhaps everything else (even though I had been exposed to COVID folks, and had the symptomns). Not surprisingly everything was negative (except for typical metabolic changes you see in fighting viruses). The best part was 6 months later I got a bill in the mail for I kid you not, ~$1,800, for these lab tests! Insurer says "if it was March then those tests would have been covered, but because it was February we didn't have those policieis in place yet". Still fighting that one, lol.

But recent events aside, let's just take a typical lab results report. Where's the "go to definitions" on these things? Where is the ability to drill in and see where my measurements fit in regard to my close 8 billion relatives?

This industry is still in the stone age.

> The physician and healthcare team will by definition > always be closer to the customer.

And the wearables will by definition always be closer to the customer.

I am not going to tell my daughter that being a physician is a viable future career like it is today (engineer or nurse would be 2 good options though).

> perhaps younger generations will not care about this aspect of privacy.

I agree. Or at least, I hope younger generations continue Obama's work and fix the laws so that your health information cannot be used against you. What a sad and stupid state of affairs that is. We need to fix that.

SPACs are today’s ICOs. For every good company like 23andMe we should expect dozens of bad ones.

This company is just one big ethical dilemma packaged Silicon Valley style to look hip.

The worst thing is that, you can’t even really opt out.

My parents tried to gift me a kit for xmas one year, "hey we think this is fun, might be useful to know if you're prone to eyeball cancer or whatever." I explained all the privacy issues and politely declined. But of course they and my sister had already gone ahead and done it, so now my family’s genetic fingerprints are in their databases, nothing to be done about it.

This is how the "Golden State Killer" was nabbed, which is obviously an example of this kind of thing being put to good use… I hope I don't have to argue against the dumb old "people who are innocent have nothing to hide" discussion here

sounds like you need to open a dialog with your congress-critters with your concerns then.

these companies are going to do whatever they want in the meantime.

That is in fact not how the golden state killer was nabbed. Uploads to GEDmatch are voluntary.

It very much was. His relatives, not knowing who he was, voluntarily uploaded their data to GEDmatch. Those fingerprints were used to identify him. Did you think he voluntarily uploaded his DNA on a lark?

His distant relatives did, like second or third cousins. The point of GEDmatch is to connect you with other potential DNA matches in their database. That is not the point of whatever service your family presumably used, and their data is not used in this manner. Apples and Oranges.

Okay, I think maybe we’re trying to making different points here. You are saying that the policies of GEDmatch are different than those of 23andMe and… I don't know who else is in this industry… mormonhumangenome.com or whatever

The point I was trying to make is that not registering with one — any — of these databases is completely pointless because the nature of the information is such that you can be fingerprinted if your siblings decide to play.

PrivacySinkholeAndMe

The long game for 23andMe will likely be using their valuable dataset for something called Personalized Medicine.

"Personalized medicine is based on using an individual's genetic profile to make the best therapeutic choice by facilitating predictions about whether that person will benefit from a particular medicine or suffer serious side effects."

In other words, they will become a platform for data-driven healthcare decisions and even development of new medicine.

Those who think their endgame is to indiscriminately sell users' data, as if they're a healthcare Mark Zuckerberg, are being unimaginative.

> Those who think their endgame is to indiscriminately sell users' data, as if they're a healthcare Mark Zuckerberg, are being unimaginative.

No, they're being realistic.

VGAC is currently trading down ~10%

> https://finance.yahoo.com/quote/VGAC/

Thanks for the tip!

Just bought some. Does this mean I own some 23andme now?

I'm a bit ignorant of how SPACs work.

You shouldn't take investment advice from strangers on the Internet, but you also should know what you're buying before you buy it.

Dan got me invested in some kind of fruit company. So then I got a call from him, saying we don't have to worry about money no more.

Likewise, the film Forrest Gump should not be considered sound investment advice

Forrest Gump is from 1995. Apple had barely begun going up then.

OMG. Back of the envelop. $5K into $APPL because Forrest Gump did would be more than $5M today. [1]

[1] https://ycharts.com/companies/AAPL/market_cap

> You shouldn't take investment advice from strangers on the Internet, but you also should know what you're buying before you buy it.

and* you also...

Who cares, the stock went up!

Wow, this is easy!

23andme was a great company, but stopped innovating a long time ago. They could gave offered a lot of different products related to sequencing, but didn’t.

I'm so glad I never did 23andMe for my kids. My wife and I did it before all the privacy nightmare revelations (and admittedly I didn't think of them myself) and originally I had planned to have my kids do it too, just to see what they got from us.

But luckily they won't take a sample from someone under two, and in the time between birth and two was when all the privacy issues became clear.

What privacy nightmare revelations?

Just wait until companies like this become more focused on B2B and just get doctors to collect the samples for them for a payout.

Is there a way to predict which SPACs will merge with which startups?

It seems like if you had knowledge of this and you could predict a highly profitable business merging with a SPAC, you could get in at the ground floor for incredible and almost immediate share price growth.

I wouldn't invest in 23andMe, but I would invest in Stripe. Which SPAC will it merge with?

> you could get in at the ground floor for incredible and almost immediate share price growth

Hence why you can't predict it. If you could, everyone else could, and there would be no appreciation of the shares when the news is released.

Only way to know in advance is good old insider information.

It's a new trend.

I didn't have "insider information" to make $300k on Gamestop. The evidence was in the open.

Right now I'm thinking that you might be able to connect the dots between SPAC owners / founders, their investment prospectus, and similar business they've dealt with.

I wonder if anyone's already done this research and found correlations.

> I didn't have "insider information" to make $300k on Gamestop. The evidence was in the open.

It really doesn't work like that. You didn't use public knowledge to make money on Gamestop; you used luck.

> I didn't have "insider information" to make $300k on Gamestop. The evidence was in the open.

What evidence? You followed a trend, and the more people followed that trend, the higher the price, the more it was talked about in wider circles, the more people got in it etc. It's just a legal version of a ponzi scheme.

This has nothing to do with predicting a hard fact such as which two entities will merge in the future.

Just like how everyone assumed that Virgin Acquisition was going to buy Virgin Orbital (both owned by Branson)...but instead will acquire 23andme instead?

As it turns out, you really can't connect the dots between SPAC owners and the company the SPAC will acquire.

No, there really isn't. I do think SPACs will sometimes seed the internet hype machine if they have a target in mind though. This particular one has been discussed a few times and doesn't seem to be a surprise to most. The problem is people (or more specifically holders of the SPAC) seem to often try to pump a particular SPAC on speculation for their gain.

For example reddit (along with twitter, stocktwits, seeking alpha, etc) was absolutely rife with posts about how "certain" PSTH was merging with Stripe. The DD was long, sock puppet accounts numerous, but sooo extremely thin it was hilarious. $CCIV is another example that has long been hyped to be merging with Lucid which has brought the value up 300% since inception and really no one has any idea if it's even truly on the table.

I think largely the problem currently with SPACs is there is so much interest that nearly any notable SPAC is growing in value no matter what info is out there, so it's another "stonks only go up" type situation with people just dumping money based on an internet whisper and somehow it ends up working.

> It seems like if you had knowledge of this and you could predict a highly profitable business merging with a SPAC, you could get in at the ground floor for incredible and almost immediate share price growth.

Take care to not fall victim of a pump & dump. Rumours about SPAC acquisitions seem to be in fashion recently and I wouldn't be surprised if SPAC owners focus on targeting retail since the whole WSB/GME thing started.

Check the SPAC subreddit and look at blogs that actually do analysis on the SPAC teams themselves. The best indicator is usually who runs the SPAC and their connections in SV + focus industry. But ultimately, you can't reliably predict it. You can do what I do and shotgun investment in several promising SPACs and hope that one hits in a reasonable amount of time (I'm 1/4 so far this year).

Yea seen a few HF's now pitching SPAC funds which essentially is the shotgun approach. There is also an ETF (of course!) - SPCX (US19423L6728)

You can also buy spac ETFs. E.g. SPCX and SPAK

That's great info! Thanks.

No way Stripe will go public via SPAC.

I've seen it correctly predicted a few times in investing subreddits.

This is what I want to read.

I know WSB banned SPACs. Did you see it on /r/investing?

SeekingAlpha has a lot of writeups on SPACs, but I don't think they're as savvy as Reddit. Totally a mixed bag.

It's pretty hard to predict when a SPAC will merge, that's basically what your risk is: the time value of your money. However if you're buying at NAV, there's almost no downside risk other than that.

Now all of China knows your('re) genetics (here)

You can look at the SEC filings for the SPAC as it will provide indication but it will be thematic at best.

DNA is your identity, it's not some password you can change.

And now it's contents will be traded as a commodity.

Say goodbye to your DNA privacy

Has anyone downloaded their DNA and then asked 23andMe to completely delete all records?

I work in this space and even I have a hard time seeing 23andMe being profitable.

Monetization of user data. Integration with the Match.com API, 'Sure you want to go out with her, you share 12.5% of your DNA'.

Open access to various government agencies, ' You share 47% DNA with this GUY who owes taxes , WHERE IS HE'.

Very much this.

Not to mention, "sorry, <XYZ> Health Insurance won't cover you because you show a slight genetic predisposition toward fingernail cancer. Good luck."

Has this happened anywhere in the US? If you work for an employer with group insurance, how can an insurer reject you or even alter your rates? If you don't work for a company with a group policy, buying off the ACA marketplace also is going to prevent the insurer from implementing these types of restrictions on coverage. Maybe this is something that would go on in the life insurance market but so much of the health insurance marketplace is heavily regulated in terms of writing policies and setting rates, that it doesn't appear that getting your DNA would do much for them.

No, using genetic information as a consideration in health insurance is expressly illegal in the US under GINA.

Notwithstanding that slight predispositions for minor conditions could be priced into an underwriting model without all that much pain — I'm not even sure this sort of exclusion you propose has been legal in the past decade or so.

My parents both submitted their DNA to 23&Me... :smh:

My mother is otherwise hyper-privacy sensitive. But I guess the draw of finding out their ancestry was too great. And, surprise-surprise, you can tell exactly where we come from by just looking at us.

> Monetization of user data. Integration with the Match.com API, 'Sure you want to go out with her, you share 12.5% of your DNA'.

this is confusingly worded. It could be interpreted as

> Sure, you [do] want to go out with her

> [Are you] sure you want to go out with her[?]

12.5% DNA match would be a second-cousin, so I'm assuming you meant the latter.

With technological progress, the path towards reaping the benefits and mitigating the risks is difficult.

I have a hard time seeing how they won't be. They have name recognition. It's like the kleenex of DNA testing. The SNP chips they use are cheap at scale. They don't need to spend money on innovation, they could continue just running SNP chips priced above cost indefinitely. Consumers don't understand the current technology, they aren't going to start one day clamoring for long read sequencing or anything that requires 23 and me to change anything at all. IMO, it's the perfect cash cow business.

SNP chips for what? Ancestry? Also carrier screening is a competitive market.

Yeah, 23andme uses a DNA microarray to genotype your sample whether it be for health screening or ancestry. It's cheap technology today.

You missed the point.

The data they gathered was less than 1% of the genome. Don't buy in.

In a letter to customers, CEO and co-founder Anne Wojcicki said, "We're about to cash out of this bitch, and go kick it on a South Pacific island. Just fair warning that the database is going to have new owners soon, who will be keen to sell access to your most-intimate biological details to anyone with an idea on how to make money on it, and a checkbook."

Funny, I have her 2006 letter and there seems to be some inconsistencies:

"As you all know, I'm rich enough from Google that I could just go kick it on a South Pacific Island. Instead though, I'm going to spend the next 15 years of my life grinding, taking flak of the press and internet trolls, so that I can set the record for helping the most people in the world learn there ancestry and pioneer mass genetic testing via the mail, mass SNPs genotyping at a level never seen before by orders of magnitude, and pave the way for a future where everyone on the planet has access to their genetic information for better health"

There's a weird push and pull on Hacker News where if a company does something unethical it's: "Well what did you expect, they have an obligation to maximize shareholder value", but at the same time founder and CEOs are often venerated as hard-working, almost selfless individuals who dedicated their lives to make the world a better place in spite of their own self-interest. It's pretty jarring.

Try not thinking of Hackernews, or any forum on the internet, as a single entity, but as many individuals. Some of them have conflicting views with the others.

Averaging the thoughts of a diverse group will just end up as white noise.

> many individuals. Some of them have conflicting views

This goes double for major political parties, and a key reason why all them end up known by their enemies as hypocrites.

That’s because we all see ourselves as the good guys in the story. It’s remarkable though how often decisions in tough situations always somehow end up benefiting yourself within whatever constraints are placed on your actions when there’s any kind of real conflict.

So if you’re the outsider, you see the harm. If you’re the insider you made the best decision possible with the information you had and the resources available to you. I think both viewpoints are correct in many ways (ignoring those that are blatantly dishonest).

It's indicative of the tradeoffs in any human endeavor and the shades of gray that come into play when evaluating those endeavors in moral terms. It can be both. Also, it's way easier to retire young if you have made a good amount of money and to live with a higher quality of life than a lot of CEOs who just have more property than they can do anything with. Being a quiet multimillionaire is great. Being a hardworking American Stakhanovite-CEO is, indeed, a lot of sacrifice for not a whole lot of real individual or familial gain. 23andme has done a lot of good and has accomplished a laudable mission, but there are also concerns that many people share about its activities or the potentially abusive things that could be done with the customer data.

There are 100 kinds of people in the world.

1) People who want to get rich first but also would be happy to make the world better

10) People who care about making the world better first but also would be happy to be rich

11) People who are enlightened and don't care about such things

100) People who just love to troll the other 11 groups

This is the best answer

Every successful founder or CEO sees themselves and their vision as fundamentally good for society, and at worst they may see some evil around their company which they'll chalk up to "price or progress". As the money starts rolling in and the price never ends up being paid by themselves (or the company) it's hard to see it as anything but a fruitful vision. One that's "good for all intents and purposes". The more money, the more of the bad intents and purposes they hand waive or brush aside.

The line runs through about the 7th zero in the founder's net worth, I think.

What unethical thing has 23andme done?

Fair enough, but however altruistically you might hold her motives, it doesn't change the fact that the new owners will surely be looking to maximize their returns through new and creative ways of using pre-existing assets. I've watched this movie many, many times over the past couple of decades.

I get that, and yeah have seen some of the same movies.

I do see a lot of potential in 23andMe (though I loathe the name—never put a number in your name! numbers are incredibly overloaded—millions of times less combinatorics; and they become outdated almost immediately—23 is a largely meaningless number).

But 23AndMe at least has built a large number of paying users. If they look at where medicine could be in 10-20 years, and have the courage, they've got a better shot than nearly anyone of leading the way. Someone could be a $1T universal health care company.

The health privacy issues I think are a red herring. Proper medical research entails generating strongly typed data that you can synthesize infinite records with one click. An individual's personal health data should be of little value, and if it's not, then we've got deeper fundamental problems with our system (which we do, but has nothing to do with 23andme)

It's not meaningless. Humans have 23 chromosomes (except for those with Down syndrome). That's never going to become outdated.

Click "go to definition" enough and you will figure out what I'm talking about.

Godmode troll activated.

If 23andme had that many paying customers, they would not have needed to go the SPAC route to avoid financial disclosure. That they have chosen to go public as a SPAC after more than a decade of existence does not speak highly of their financial situation or their prospects for future earnings (and this is generally something that nearly all recent SPACs share).

It could be.

It could also be that they just saw no reason to enrich a set of insiders and saw a SPAC as a way to stick it to the man.

I have zero clue. My DD is basically on this page, and though I've been a customer since the beginning and have referred a bazillion people, a lot of that has just been due to lack of competition and not necessarily because I've been thrilled by 23andMe's stuff.

It could also be that they just saw no reason to enrich a set of insiders and saw a SPAC as a way to stick it to the man.

A SPAC is the ultimate way to enrich a set of insiders...The SPAC initiators get to buy additional shares of the SPAC at discount prices that other SPAC investors don't have access to. And unlike with a traditional IPO, the targets don't have to disclose those arrangements or other sweetheart details that the target executives receive as part of the acquisition. Another big consideration for a SPAC is that executives get to sell their post-acq stock immediately, while normal employees are still subject to a lock-up period to "protect" the stock price from downward pressure.

Ugh yeah I had a feeling this may be the case. I was hoping SPACs might be better, but haven't researched it.

It's almost like we should have a thing called "public markets" where the public can invest directly in new ventures. /s

(Gotta say I'm with Cuban and Mr Wonderful and Elon with the idea that regulators are pretty awful in their blindness to 2nd order effects)

Maybe the blockchain is the way to go after all.

Regulators are aware of these effects. They have limited ability under the law to pursue things that only have 2nd order effects.

Blockchain won't help; you would have the same problems but with even fewer ways to address them.

Pretty sure there was some personal interest at play. She was married to Sergey Brin. His mother has/had Parkinson’s and I believe I read that based on genetics he almost certainly will also. 23andMe is a data play original conceived, in part, to gather genetic data to further research to extend the life of a billionaire.

Here’s hoping we all benefit from this work. It’s easy to spin things as sinister if that’s what you want to do.

Did she honestly say this? Do you have a link?

If this is true then, wow... just wow!

Edit: given that Zuck took the piss out of his customers many years ago [0] as a teenager and is now a billionaire then I guess anything's possible.

[0] - https://www.esquire.com/uk/latest-news/a19490586/mark-zucker...

I'm... how you say?... paraphrasing.

She did not say that

Remember when the FBI scanned the anonymous DNA database, from either this or some similar company, found a match, then used that match to get a warrant for the match's personal info? I do.

You're so wrong about the specifics that you're being (intentionally?) misleading.

The database they use is GEDmatch, which is a fully volunteer non-for-profit operation. The entire point of the database is for users to upload their dna to allow anyone from the public to conduct genealogical research. GEDMatch does not even provide sequencing services, so there's no way someone would accidentally share.

There were no specifics at all in what I posted. I'm not sure what you're talking about. I welcome actual information, though.

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