23andMe Files for Bankruptcy & Sesame Street’s Rocky Finances

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0:27Good Morning Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, 23andMe went bankrupt. So what happens to all of our DNA? Then U.S.-Mexico border agents are seizing a lot of contraband these days, but I'm not talking about drugs. I'm talking about eggs. It's Tuesday, March 25th. Let's ride.

0:51March Madness hasn't even gotten to its second weekend yet, and a bracket savant is already walking away with a$1 million prize, courtesy of Warren Buffett, An anonymous employee of Flight Safety International, a subsidiary of Buffett's Berkshire Hathaway, won the$1 million after correctly picking 31 of the 32 games in the first round of the men's college basketball tournament. Buffett has been running this bracket contest for years, but relaxed the rules this March because he desperately wanted someone to win while he was still up and at him. It worked, and interestingly, this employee was one of 12 Berkshire employees in total to pick 31 of the 32 games, but he took home the top prize because he correctly chose 29 games consecutively before a loss.

1:35Toby, I've never seen someone so happy to give away a milli. I mean, this was the year to do it. This is the first tournament since 2007 that no team seeded 12 or lower made it to the Sweet 16. It's also the first time in history that the Sweet 16 is made up of only power conference teams, So you're only seeing teams from the SEC, Big Ten, Big 12, and ACC. That is it. So no Cinderella story this year. So it was the perfect storm of Buffett getting more lenient in his older age, plus this being a historical outlier in terms of chalkiness of the overall tournament. Regardless, pretty sweet bonus to take home, and Gladwarren finally found the sweet spot for his prize.

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3:29In fact, you can even target buyers by job title, industry, company, seniority, skills. And did I say job title? See how you can avoid the void and reach the right buyers with LinkedIn ads. Spend$250 on your first campaign and get a free $250 credit for the next one. Get started at linkedin.com slash campaign. Terms and conditions apply. 23andMe couldn't walk the double helix tightrope any longer. The long struggling DNA testing company filed for bankruptcy late Sunday night and announced that its CEO, Ann Wojcicki, would be stepping down from her role. In a statement, Wojcicki took responsibility for the collapse of the once high flying startup, but said she still believed in its long term vision and would be making a bid to buy it out of bankruptcy.

4:1223andMe had been a cast member of The Walking Dead for a few years now, founded in 2006. It was all the rage in Silicon Valley for selling popular at-home DNA testing kits that help people learn about their family histories and genetic profiles. The problem is, once you know that, you don't really need to buy anything more from the company. And after failing to create another product that caught on with consumers, 23andMe's$6 billion valuation in 2021 plunged to essentially nothing today. While the bankruptcy process gets going, one question is sure to dominate the conversation. What will happen to the 15 million DNA samples that 23andMe is sitting on?

4:52It collected a nearly unprecedented treasure trove of human genetic information through its spit tests. Is that now going to be up for sale to the highest bidder? Looks like Chapter 11 is just the first of many chapters in this unfolding saga. Right. If you went to pretty much any major news site yesterday and just Googled 23andMe, you saw an explainer of how to delete your data from their database because a lot of people are having those same questions of, okay, I gave you my data. Now you're going out of business. What actually happens to that genetic gold mine, essentially? And it can be sold to the highest bidder because technically one of the big assets that 23andMe has is this big trove of your genetic data.

5:33So when what happens in bankruptcy auctions, assets go up for sale and the company had already been using and mining that data to try to create these pharmaceutical drugs. They've been working with the pharmaceutical company GSK. So a new buyer could look at it and say, hey, we want to do the same thing here. So it is a real concern. There are privacy policies that go towards protecting that. But if a new person and a new buyer came in, they could change those right away. So it is one of those things that Google 23andMe, you saw a lot of people asking the same questions that you probably are having.

6:07Well, I'll save you a Google. Here's how you delete your 23andMe data. It's pretty easy. You just log onto your account, go to settings, account information, and then you should see something called delete your account. 23andMe is going to prompt you to confirm your decision that it's permanent and irreversible. Well, maybe it's bankruptcy is permanent and irreversible. So you can go ahead and delete your information that way. But also, So this is not the first time that a company with biogenetic information, very sensitive personal information on humans, has gone bankrupt. We've had a lot of those.

6:41Biome was one, Ubiome was one example a few years ago. What happened during that bankruptcy proceeding is that the judge appointed an abudsman, who's this third-party observer, to make sure that nothing super sketchy was going on with the sale of this biologic information. And he said the the abundance man weird word said that said that the sale could go through with certain restrictions. So we'll see what happens with 23andMe. But their privacy policy does state that in the event of a sale, bankruptcy, merger, acquisition, reorganization, that customers personal information may be accessed, sold or transferred.

7:23And is this company just going to go away after bankruptcy? Wojcicki is trying to buy it and take it private herself, but also 23andMe has 50 drug candidates currently in the pipeline. Two so far have made it to human stage trials. So some data could be released later this year to see if any of those drugs work. So potentially there's a glimmer of hope for this company and it might just not drift away. But it is a glimmer at best because these human trials have a lot of risks and a lot of different variables associated with them. So that is potentially the future path forward for this company, but it is a little bit of a rocky one.

7:59Moving on, imagine Scarface, but instead of Tony Montana slinging cocaine, it's your neighbor Janet smuggling a dozen grade A eggs across the Mexican border. Welcome to Eggflation 2024, where cheap eggs and potential fines await. Thanks to a bird flu epidemic that's scrambled the egg supply chain and pushed up prices, some shoppers have resulted to becoming egg traffickers, bringing in eggs from Mexico to the U.S. where a dozen can cost just$2. U.S. Customs and Border Protection have reported 3 ,254 egg-related interceptions in the first two months of the year, up 116 % from the same time last year, with San Diego alone seeing egg bust spike 158%.

8:42Egg mules, which are oftentimes just normal people who like cheap eggs, are getting creative, slipping cartons into grocery bags alongside tortilla chips or hiding them under blankets when questioned by border officials. A lot of them, though, like your neighbor Janet, are probably unaware that smuggling fresh items like eggs is actually illegal due to concerns about bird flu and other diseases entering the United States. So your hankering for Juevos Rancheros could end up earning a$300 fine with repeat offenders shelling out up to$10 ,000. Neil, egg trafficking sounds a little ridiculous, but considering the massive price gap between Mexican eggs and American eggs, it makes sense that people are trying to sneak a few back over the border.

9:23Totally makes sense. U.S. Customs and Border Protection intercepted egg products on 3 ,200 occasions this January and February. That is compared to 130 incidents of them seizing fentanyl. There's a lot more egg smuggling going on than drug smuggling. But that is very understandable because a dozen eggs cost American consumers$5.90 in February. That's double what it was in 2024. You're seeing a little arbitrage play happen. Unfortunately, there are border protections because the United States does not import a lot of eggs due to concerns of even more disease spreading from eggs from other countries.

10:04But you're seeing those restrictions loosened as the Trump administration goes full pedal to the metal to try to alleviate this crisis. Right. And we are turning to other countries to try to source eggs from places like Turkey, South Korea. Turkey has actually agreed to send 15 ,000 tons of eggs to the U.S. through the summer. South Korea has also signed on to sell eggs to the U.S. But you're right. There are a lot of these regulations and laws preventing each country from inner to from importing eggs into the U.S., mainly around these diseases that the U.S. is currently struggling with. So, yes, a lot of people who are going to Mexico.

10:39I mean, I'm talking about your neighbor, Janet, because they mostly are just normal people who said, oh, two dollars for a dozen eggs. Like, let me just bring some back when they are actually pressed by a border official. They give up that. Yes, we have eggs with us. and they didn't know it was illegal. But it is fascinating to see just how many more seasoners of eggs there are than, yeah, you know, something like fentanyl that have dominated headlines. And I have some good news and some bad news on the egg price front. The good news is that wholesale egg prices have fallen by half in the past few months.

11:09So you might see some relief there. The bad news is that that may not translate to your grocery store shelves because at the same time that wholesale prices are increasing, There's going to be a surge in demand right now around Easter time for eggs. So Brooke Rollins, who's the USDA secretary, said it's good that we're seeing wholesale prices come down. But the demand side of the equation is likely to push prices up even further as we head into the Easter season. Now would not be a good time to ask Mr. Snuffleupagus why the long face. Sesame Street is in a painful spot financially. According to the New York Times, the nonprofit behind the beloved kids show Sesame Workshop is facing a perfect storm of financial problems that may require significant changes and time to recover from.

11:55The storm has three fronts. For one, the organization recently lost its distribution contract with HBO, which ended a decade long deal that paid it up to thirty five million dollars each year for the rights to the show. Second, the Trump administration's cuts to USAID means fewer grants for the nonprofit. A financial hit it had not seen coming or prepared for. And third is the changing winds in children's TV programming. The battle for kids' attention is getting a lot more competitive, and Sesame Street is losing out to upstarts like Coco Melon and Bluey. So as the show kicks off production for its 56th season next month, things are looking bleaker than they have been in years.

12:33Is Cookie Monster going to start driving for Uber? I tell you what, if he is, I'm going to give him a good tip. But you're right. I mean, there's Main Street, there's Wall Street, but I'm most concerned on what's going down on Sesame Street. Sesame Street, even just a few years ago, was doing just fine. As recently as 2022, Sesame Workshop generated$271 million in revenue, more than$20 million in profit. But they used the word perfect storm because so many factors kind of came together to really put it in a tough spot. Another issue is just on the streaming front. during the time where, you know, HBO originally signed the deal to air Sesame Street episodes, there was this big chase for subscribers instead of profits.

13:13Let's just try to gain market share here. So these companies were shelling out these big deals left and right. Now Wall Street has soured on this approach and they want to see some profitability. So HBO is saying like, we can definitely shift our strategy, move away from kids programming, try to turn more towards profitability. So that was another issue that it just kind of conceded with this huge downturn in streamers selling out these massive contracts for IP that they feel like they don't need anymore. And HBO told Sesame Workshop that it was just not interested in doing kids program anymore.

13:46They wanted to focus more on family and adults. And so they ended the contract. So now Sesame Street is now shopping around with other streamers for a distribution deal in a financial windfall that it absolutely needs. They're also making some programmatic changes to the show itself in order to get kids watching again because there are so many other shows that are more popular than Sesame Street at this point, which is sad, but true. Bluey Cocoa Melon, then YouTube. Miss Rachel is huge over there. So they're changing the show a little bit. They're going to have two 11-minute stories to open and close the show and have a shorter animated feature in between.

14:23They're going to try to add more comedic elements. They want you to laugh. We want kids to laugh like out loud a little bit more. And they're also introducing a signature song for each episode. So they're trying to raise up the dopamine levels here with Sesame Street. We know it's very educational. It's very pleasant to watch. But that just doesn't cut it in today's kids entertainment field. Up next, it is time for Toby's Trends. The Jack Welch Management Institute at Strayer University helps you go from I know the way to I've arrived. with our top 10 ranked online MBA. Gain skills you can learn today and apply tomorrow.

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16:18If you've ever wanted to feel poor, lazy, and dehydrated all at the same time, then boy, do I have the story for you. Meet Ashton Hall, a fitness influencer, whose 3.52 a.m. wake-up call, ice water face dunks, and possibly the most hydrated workout in human history just powered an unlikely brand to the forefront of the Internet's collective consciousness. And it's that brand, Saratoga Springwater, that I want to talk about on today's edition of Toby's Trends. There is this video that first went viral on Instagram and TikTok before spreading to X, showing Hall's absurd morning routine. At 3.52 a.m., he wakes up.

16:54At 3.54 a.m., he pours out a cup of Saratoga water from its striking blue bottle. At 4.04, he works out next to a bottle of Saratoga water. Then at 5.49 a.m., he dunks his face in an ice-cold bowl of, you guessed it, Saratoga water. The routine continues until mid-morning where a banana peel gets involved and more bowls of ice cold water emerge. The whole thing has more product placement than a Michael Bay movie. The video has gathered 100 million views on TikTok, 675 million views on X, and garnered tweets from MrBeast to Sweetgreen. Google Trends data shows that searches for Saratoga water spiked 1 ,000 % to an all-time high since Sunday.

17:35This video got so big, it literally moved the market. Saratoga Water's parent company, Primo Brands, saw its stock rise by as much as 16 % in pre-market trading yesterday, though it gave back most of those gains by the end of the day. Neil, this was one of those rare monoculture meme moments that dominated timelines over the weekend, and I am very curious to see how Saratoga plays its cards going forward to capitalize on it or ignore it. Yeah, it's pretty interesting to see what they're going to do. This is lightning in a bottle where literally everybody on the internet is talking about this one particular video in which your product is a star.

18:12And Saratoga's star has been rising for a couple years now since it was bought by Primo Brands in 2021. It went from$13 million in sales to$71 million in sales in 2024, 76 % compound annual growth over that time span. So this mineral fancy water has been enjoying an upsurge over the past few years. and now maybe this rocket ship could take off, but we'll see whether it translate to sales. At the very least, it translated to a lot of brand awareness. A lot of the social media pros on social media that I follow immediately went to Saratoga Water's Instagram to see how they were capitalizing on the moment.

18:52And for a lot of time, it was radio silence on that front. They finally have made multiple posts referencing it. They have one saying, plunge if you must, and they credit Hall for his video. They also posted this stylistic, artistic rendering of an ice bowl next to a banana, showing that they're in on their joke, but they're still kind of doing it within their branding guidelines. And I've seen multiple takes. Some people are like, fire your social media manager. They haven't capitalized enough. Other people are like, no, this is a luxury brand. It's been around since 1872. You do not need to rearrange everything about your brand to capitalize on something that's been cooking for two days now.

19:27They did eventually hit it in their own way, which I think is smart. So just fascinating to see how, what would you do if you became just the internet main character for a few days? Would you just play it cool or would you kind of wink, wink, nudge, nudge, make note of it? And it looks like they took the second bit. Sign a few NIL deals. That's potentially true. A lot of people are like, yeah, get some basketball players dunking their face in the water. That seems like a good brand activation. So I do think that overall, though, this is a relatively small portion of Primo Brands' portfolio, which is why we saw the stock do this huge run up.

20:01And then everyone was like, wait a second. This brand does 71 million dollars in net sales. This is a multi-billion dollar company. That owns like Poland Spring. Right. That brings in more than a billion dollars a year. So that's why I think we saw the big run up. And everyone's like, yeah, it's not that big a part of the pie. But when you go to a fancy restaurant, you're probably going to see Saratoga water there. And you might be a little bit more interested in what it's all about. Now, they had this really buzzy partnership with Bravo's Top Chef, and they're trying to get more into those high-end restaurants and bars and work with mixologists and sommeliers and things like that.

20:34So the high-end mineral water industry is kind of booming right now. But just when a server comes over, I'm just going tap straight up. Now, let's sprint to the finish with some final headlines. Up first, it seems like the Trump administration's national security team needs to brush up on their group chat etiquette after they accidentally added the Atlantic editor-in-chief Jeffrey Goldberg to a chat discussing war plans for Yemen on the messaging app Signal. The leak involved high-ranking officials, including Defense Secretary Pete Hegseth, who shared detailed operational plans for strikes in Yemen, as well as Vice President J.D.

21:10Vance. President Trump claimed he was unaware of the incident, which has sparked bipartisan criticism and calls for an investigation. The National Security Council has confirmed the authenticity of the signal messages and is investigating how Goldberg was mistakenly added to the group chat in the first place. Representative Don Bacon of Nebraska, who is a former Air Force Brigadier General, summed it up well for Axios, saying, I've accidentally sent the wrong person a text. We all have. But he added, the unconscionable action was sending this info over non-secure networks. Neil, an inadvertent number belonging to a journalist ending up in a highly confidential group chat is quite the security breach.

21:49It's hard to believe. And Signal is a consumer app that is used by journalists and Washington officials because it's end-to-end encrypted. You can send disappearing messages. You can create aliases. aliases. It's a pretty secretive social app. But when you are planning something like an airstrike, it is custom for U.S. officials to go into the Situation Room, which is known as a sensitive compartmented information facility. And even when you're texting or communicating via mobile device, you basically do a mobile SCIF, do a mobile version of that. So truly a stunning thing to include not just a random person, but the editor of an influential magazine in your group chat.

22:33And this is sure to dominate conversation in Washington in the week to come. On the tariff front, it was another day of more head fakes than a Peyton Manning snap count. In the morning, President Trump vowed to slap a 25 percent tariff on all U.S. imports from countries that buy oil and gas from Venezuela, which would target China and India in particular. Then later in the day, Trump signaled that he might dial back planned reciprocal tariffs on April 2nd, which he's dubbed Liberation Day for rebalancing trade deficits. After Trump said he may give a lot of countries breaks, stocks rallied for their second straight day of big gains.

23:09Still, no one really knows what tariffs will be announced on April 2nd. Right. April 2nd is a date to circle. It is a date that Trump has continually referenced. But I think what happens with Venezuela is a perfect microcosm of kind of the broader tariff plan here. Obviously, disrupting global oil trade by telling certain buyers from Venezuela oil, forcing them to seek alternatives is going to be a disrupting force. And one person who's not happy is Chevron, which is the second largest U.S. oil company. They have to wind down their production in Venezuela. But as soon as that was kind of ordered, the administration also gave them a break and said, you don't actually have to do it by this date, which, again, I call it a microcosm because we get dates circled and then it gets the can gets kicked down the road so we're seeing it happen in venezuela and we're seeing it happen on a micro on a macro scale as well we'll see if liberation day is as you know big a day as as trump has made it sound or if it's going to be another thing where they're dialed back yeah they dial it back a little a little further for our next headline united airlines is raising the price of chilling in its airport lounges before a flight because of insane demand.

24:20The price to chill is going up after United decided an overhaul to its lounge membership program was in order, which has seen them reduce amenities and increase the cost when its lounges are more in demand than ever. Enter a new two-tier membership system with the basic individual membership costing$750 per year, which will get you access to United Club lounges without guest privileges. The more premium all-access membership price at $1 ,400 annually, includes access for the member and up to two guests, as well as entry to other Alliance member lounges. Neil, travelers have complained that lounges are becoming overcrowded and no longer feel exclusive.

24:57Easiest way to rectify that if you're United, make them more expensive and allow fewer guests in. This is basic supply and demand. Demand for these lounges is through the roof right now. There are long lines just to even get into the lounges, which is Pretty cringy. So United says, and other airlines are saying, okay, well, we're seeing a huge demand. Let's just jack up the price, get fewer people in there, and we'll make more money. It comes at a time when these co-branded credit cards and other sources of revenue are becoming an even bigger part of airlines' business. Aside from just, you know, selling airfare, United brought in$3.5 billion in other revenue last year, which was up 10 % from the year before.