23andMe Stock Crashes After Bankruptcy Filing—What Happens to Users’ Genetic Data Now?
Millions of DNA profiles hang in the balance as bankruptcy opens the door to potential data sale. Here’s how 23andMe users can delete their data before it’s too late.
Shares of 23andMe (NASDAQ: ME) imploded this week after the embattled genetic testing company filed for Chapter 11 bankruptcy and announced the immediate resignation of co-founder and CEO Anne Wojcicki. Once hailed as a Silicon Valley success story, the company’s collapse now raises one alarming question: what happens to the genetic data of over 15 million customers?
The market reacted swiftly and brutally. On Monday, 23andMe stock plunged nearly 60%, extending a 12-month nosedive that has seen its value evaporate by 88%. By comparison, the S&P 500 (SPX) has gained 10.5% over the same period.
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Mark Jensen, Chairman and member of the 23andMe Special Committee of the Board of Directors, stated via press release:
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. We expect the court-supervised process will advance our efforts to address the operational and financial challenges we face, including further cost reductions and the resolution of legal and leasehold liabilities. We believe in the value of our people and our assets and hope that this process allows our mission of helping people access, understand and benefit from the human genome to live on for the benefit of customers and patients.
A Personal Legacy at Stake
Wojcicki, whose sister is Susan Wojcicki, the former CEO of Alphabet (NASDAQ: GOOGL) owned YouTube, stepped down as 23andMe CEO but remains on the board.
In a post on X late Sunday, Wojcicki, who once held supervoting shares that gave her control over nearly half the company, wrote: “I have resigned as CEO of the company so I can be in the best position to pursue the company as an independent bidder.”
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…
— Anne Wojcicki (@annewoj23) March 24, 2025
Her resignation marks the end of an era for a company that promised to revolutionize personal healthcare by unlocking the secrets of our DNA. Instead, it now stands on the auction block, its most valuable asset—not saliva kits or lab equipment—but the intimate genetic blueprints of millions of people.
“Your DNA Is an Asset”
That genetic database, which once powered partnerships with pharmaceutical companies like GSK and fueled the company’s aspirations in drug development, is now central to the bankruptcy proceedings. And that’s what has privacy advocates and lawmakers deeply concerned.
On Friday, California Attorney General Rob Bonta issued a statement regarding 23andMe:
California has robust privacy laws that allow consumers to take control and request that a company delete their genetic data. Given 23andMe’s reported financial distress, I remind Californians to consider invoking their rights and directing 23andMe to delete their data and destroy any samples of genetic material held by the company.
California residents have the legal right to request the deletion of their genetic data, thanks to state privacy laws. Customers in other states? Not so lucky. Washington’s My Health My Data Act and the European Union’s GDPR provide similar protections, but for most Americans, those legal guardrails don’t exist.
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Scrambling for Deletion
As news of the bankruptcy broke, the 23andMe website struggled to handle a surge of users attempting to delete their data. Customers reported error messages and long wait times from customer service.
Wojcicki, in her farewell post on X, sought to reassure the public, writing:
If I am fortunate enough to secure the company’s assets through the restructuring process, I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide.
But customers aren’t feeling reassured.
“This situation really brings home the point that there is still no national health privacy law in the US protecting your rights unless you live in California or Washington. Meanwhile, we continue to evolve our understanding of how genetic information has value, but also has unique vulnerability,” said Andrea Downing, a security researcher and co-founder of The Light Collective, a digital rights nonprofit.
Promises, But No Guarantees
23andMe insists that any new buyer will be required to follow applicable laws regarding data use. In a letter to customers, the company stated: “Any buyer of 23andMe will be required to comply with applicable law with respect to the treatment of customer data.”
That sounds good—on paper. But legal experts warn that even existing privacy policies can be changed under new ownership, especially if users click “accept” without reading the fine print.
“The company has legal obligations regarding information collected under the current policies,” said John Verdi, senior vice president of policy at the Future of Privacy Forum.
In past bankruptcies, such as that of uBiome in 2019, courts approved the sale of private medical data—albeit with restrictions—after reviewing recommendations from a court-appointed consumer privacy ombudsman. A similar ombudsman could be assigned in 23andMe’s case.
From Spit Parties to Fire Sale
Founded in 2006, 23andMe dazzled investors with the promise of democratizing genetic insight. Wojcicki helped popularize its cheek swab kits by hosting celebrity “spit parties” and positioning the product as a must-have holiday gift. Its slogan, “Welcome to You,” captured the public imagination.
But after going public in 2021 at a valuation of $6 billion, reality hit hard. The company failed to develop a profitable business model, struggled to sell subscriptions, and faced regulatory hurdles and litigation, including a $30 million settlement over a massive 2023 data breach that exposed the profiles of roughly 7 million users.
That breach, combined with declining demand and costly R&D missteps, proved fatal.
The company now has $277 million in assets and $215 million in liabilities, according to bankruptcy filings. It secured a $35 million debtor-in-possession loan from JMB Capital Partners to continue operations during the sale process, with a deadline of May 7 to receive binding bids.
What You Should Do Now
Customers worried about their data have limited options but should act swiftly. You can log into your 23andMe account, go to Settings, and select “Delete Data” to begin the process. If you opted to let the company retain your biological sample, you can also instruct them to destroy it under Preferences.
Whether those deletion requests are honored remains to be seen. Some legal experts caution that even deleted data might still exist in backup systems or archived databases.
“In my opinion, these privacy policies—especially in the context of acquisitions in the venture capital and private equity space—aren’t worth the paper they’re printed on,” said cybersecurity expert Kenn White. “For regular people out there who use these services, you’re pretty much on your own. My advice is to request your data get deleted as soon as possible”
With its stock nearing zero and its future in limbo, 23andMe’s downfall offers a stark warning about the risks of blending cutting-edge science with tech startup economics.
Your DNA may be unique—but now, it’s also up for grabs.
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