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

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

#111

Post by trott »

Wronnay wrote: post #95

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.

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

#112

Post by stickfigure »

AlexandrB wrote: post #65
breck wrote: post #44

Earlier quoted context omitted.

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…

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.

What unethical thing has 23andme done?

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

#113

Post by mywittyname »

offtop5 wrote: post #93
sjg007 wrote: post #75

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'.

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.

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

#114

Post by smallscientist »

bhickey wrote: post #97
ericmay wrote: post #40

Earlier quoted context omitted.

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 y…

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.

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

#115

Post by [deleted] »

ericmay wrote: post #82
ethanbond wrote: post #73

Earlier quoted context omitted.

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 neve…

[deleted]

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

#116

Post by smallscientist »

anthuswilliams wrote: post #43
lordnacho wrote: post #36

Earlier quoted context omitted.

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.

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.

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

#117

Post by dehrmann »

mywittyname wrote: post #110
theptip wrote: post #106

Earlier quoted context omitted.

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 poo…

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.

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

#118

Post by dehrmann »

theptip wrote: post #106
engineer_22 wrote: post #10

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?

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 poo…

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.

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

#119

Post by KoftaBob »

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.

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

#120

Post by tedunangst »

mywittyname wrote: post #110
theptip wrote: post #106

Earlier quoted context omitted.

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 poo…

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

https://spactrack.net/activespacs/
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