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Stocktwits users spotted a media report about Richard Magides, the director of Singapore-based Zentree Investment and 23andMe's second-largest shareholder, expressing interest in backing a rescue effort.
Shares of genetics research company 23andMe Holding Co, which recently filed for bankruptcy, notched its best session ever on Thursday after obtaining a legal nod to start an asset sale.
Late on Wednesday, 23andMe said it had secured a U.S. bankruptcy court approval for its initial Chapter 11 motions, including wage payments, vendor compensation, and a $35-million debtor-in-possession financing agreement with JMB Capital Partners.
The court also authorized a sale process for most of its assets, requiring buyers to adhere to 23andMe's consumer privacy policies.
The company, working with Moelis, will solicit bids over 45 days. A second hearing on further relief, including final approval of the financing facility, is set for April 22.
The news sent 23andMe's stock soaring more than 45% on Thursday, although it slid in after-hours trading.
On Stocktwits, message volume about 23andMe has surged by over 26,000%, while its following has grown by 4% since the company filed for bankruptcy during the weekend.
Sentiment on the platform shifted from 'bearish' to 'extremely bullish' in a day.
Retail investors speculated on potential buyouts, including one from co-founder Anne Wojcicki, who stepped down as CEO after the bankruptcy filing to pursue a takeover as "an independent bidder."
One user estimated the company's genetic data alone could be worth over $1 billion, suggesting a buyout in the "$3-$5 range” per share.
They also argued that even at a lowball valuation of $10 per user, the company could still be worth $100 million after debt, making it an attractive acquisition target.
Another saw a Wojcicki buyout as unlikely and speculated that Big Pharma, international buyers, or even Chinese biotech firm BGI could become potential acquirers.
Retail investors also cited a media report about Richard Magides, the director of Singapore-based Zentree Investment and 23andMe's second-largest shareholder, expressing interest in backing a rescue effort.
"We believe this business is not only salvageable but could be worth over a billion dollars if the right changes are made," he reportedly said.
23andMe, founded in 2006 by Wojcicki, Linda Avey, and Paul Cusenza, quickly became one of the hottest biotech startups with its DNA testing services that let users explore their ancestry and genetic traits through simple "spit kits" mailed to their homes.
The company went public via a blank-check merger in 2021, at the height of the COVID-19 pandemic, reaching a peak market capitalization of $6 billion.
However, by 2024, its valuation had plummeted to just $120 million as it struggled to churn a profit despite amassing a customer base of 15 million.
Following its bankruptcy filing, 23andMe's login portal crashed Monday evening as users rushed to delete their genetic data.
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