AltIndex’s AI-driven platform predicted 23andMe’s bankruptcy 18 months in advance by detecting red flags in web traffic, social media, app downloads, and employee sentiment. Despite the warning, many investors held on until the stock plummeted over 97%. This highlights the importance of alternative data in making faster, more informed investment decisions.
The recent collapse of 23andMe, one of the leading names in genetic testing, has raised concerns about the future of the direct-to-consumer DNA-testing market. While many were caught off guard by the company’s bankruptcy filing, the early warning signs were clearly visible to those who understood the power of alternative data. AltIndex, an alternative data platform, issued a sell signal on 23andMe 18 months before its financial troubles came to light, helping investors make informed decisions and avoid significant losses.
AltIndex’s AI-driven platform uses alternative data to track real-time changes in companies, providing early indicators of potential risks that traditional metrics might overlook. In the case of 23andMe, the platform detected several key red flags long before the company’s eventual bankruptcy filing on March 24. AltIndex’s algorithm detected a steady decline in consumer interest and engagement with the brand, including drops in web traffic, social media engageAltIndex’s AI-driven platform predicted 23andMe’s bankruptcy 18 months in advance by detecting red flags in web traffic, social media, app downloads, and employee sentiment.
Despite the warning, many investors held on until the stock plummeted over 97%. This highlights the importance of alternative data in making faster, more informed investment decisions. ment, and employee sentiment. This data-driven warning was issued in August 2023, when 23andMe’s stock was valued at $29 per share.
Key data points behind the sell signal
The sell signal issued by AltIndex was based on a comprehensive analysis of multiple data points.
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Web Traffic Decline: A steady drop in visits to 23andMe’s website indicated waning consumer engagement, a critical factor for any company in the consumer-facing sector.
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Social Media Activity: A decline in 23andMe’s social media following on platforms like Facebook and Twitter further suggested reduced visibility and reach, contributing to a negative outlook for the company.
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Mobile App Downloads: The platform also tracked a consistent fall in the number of downloads for 23andMe’s mobile apps, pointing to shrinking customer interest and engagement with the company’s offerings.
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Employee Sentiment: Internally, employee sentiment was also on the decline, with signals suggesting low morale and a lack of confidence in the company’s future. This insight was crucial, as it often serves as an early indicator of larger organisational issues.
Together, these signals contributed to a sharply reduced AI score for 23andMe, prompting AltIndex to issue a strong sell recommendation. Despite these warnings, many investors continued to hold onto their shares, hoping for a turnaround. However, the stock price eventually plummeted, and by the time 23andMe filed for bankruptcy in March 2025, its stock had dropped by over 97%, trading at a mere 65 cents per share.
The power of alternative data in investment decisions
The 23andMe case highlights the critical role of alternative data in today’s investment landscape. Traditional financial metrics, such as revenue and earnings, often fail to provide timely insights into the real-time health of a company. By the time quarterly reports are released, it is often too late for investors to act. In contrast, alternative data offers a more dynamic view, enabling investors to make faster, more informed decisions.
For investors who acted on the AltIndex sell signal in August 2023, the decision to exit at $29 per share meant protecting most of their capital. Those who went short on the stock or purchased put options could have potentially made substantial profits as the price dropped below $1. This demonstrates the power of alternative data, not just as a valuable tool for spotting risks, but also as a way to capitalise on market changes before they become widely recognised.
How AI and alternative data can drive better investment outcomes
The downfall of 23andMe serves as a powerful example of how alternative data platforms like AltIndex can offer investors a significant advantage. By tracking a range of real-time data signals, AltIndex was able to provide early warnings that traditional financial analysis could not have predicted.
The platform monitors thousands of companies across various industries, including the biotech and tech sectors, using a variety of data sources, including app usage, social media engagement, employee sentiment, and website traffic trends. This approach enables investors to gain a deeper understanding of a company’s health, helping them make more proactive decisions that reduce risk and enhance returns.
Himani Verma is a seasoned content writer and SEO expert, with experience in digital media. She has held various senior writing positions at enterprises like CloudTDMS (Synthetic Data Factory), Barrownz Group, and ATZA. Himani has also been Editorial Writer at Hindustan Time, a leading Indian English language news platform. She excels in content creation, proofreading, and editing, ensuring that every piece is polished and impactful. Her expertise in crafting SEO-friendly content for multiple verticals of businesses, including technology, healthcare, finance, sports, innovation, and more.
