Luke Lango Issues Dire Warning

A $15.7 trillion tech melt could be triggered as soon as June 14th… Now is the time to prepare.

Tue, June 6 at 7:00PM ET

What Is Going on With 23andMe (ME) Stock Today?

  • 23andMe (ME) stock has more than doubled so far this month, with shares up 127% at today’s high from the July 29 low.
  • Invitae (NVTA) and Ginkgo Bioworks (DNA) have been surging as well.
  • The group appears to be losing steam rapidly, however.
A close-up shot of the saliva collection kit from 23andMe.
Source: nevodka /

Shares of 23andMe (NASDAQ:ME) stock are all over the map today. This is a continuing theme for the month; ME stock has exploded over the past nine trading sessions.

From the July 29 low to today’s high, ME stock has rallied 127%. At today’s high, shares were also up more than 42%, although the stock is now up just 7% on the day.

Since the beginning of August, ME stock has rallied in every session but one. It closed lower by 6.3% on Aug. 9. But even that day could be considered a win by the bulls.

Shares fell then following 23andMe’s disappointing quarterly results. In the most recent quarter, the company lost 20 cents per share on revenue of $64.5 million. The latter figure grew just 9% year-over-year (YOY).

When the company provided guidance for the full year, the news was also devastating. Management expects revenue of between $260 million and $280 million this fiscal year. That’s well short of analyst estimates of roughly $340 million. On the plus side, though, the company did reiterate the outlook earlier this week, although it expects a hefty loss on the year of around $370 million.

That said, ME stock hasn’t been running wild on its own of late. Shares have actually had quite a bit of help.

What’s Driving ME Stock Higher?

Despite the poor earnings results, shares of ME stock have been screaming higher lately. But so have many other biotech stocks. There are a few things driving the action in this group.

For one, biotech mergers and acquisitions (M&A) activity is picking up. Interest in short squeeze stocks like GameStop (NYSE:GME) and Bed Bath & Beyond (NASDAQ:BBBY) has been rising, too, helping these beaten up biotech names climb.

This niche group includes stocks like Invitae (NASDAQ:NVTA) and Ginkgo Bioworks (NYSE:DNA). Specifically, Invitae exploded higher by nearly 300% on Wednesday. Meanwhile, Ginkgo — a large holding for Cathie Wood’s Ark Invest — rose more than 50% at one point today.

Put simply, this group has seen a short-term burst. However, they already appear to be losing speed; ME stock is now up just 7% for the day. If this trend holds, these stocks could be set for more pain. Or if the run does have more room, this week’s highs could be tested yet again.

At this stage, investors should probably proceed with caution.

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed

On the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Article printed from InvestorPlace Media,

©2023 InvestorPlace Media, LLC