23andMe Board Quits Over Plans to Take DNA Testing Company Private

Disagreements Over CEO’s Take-Private Proposal Lead to Mass Resignation

The seven independent directors of 23andMe’s board have resigned, citing disagreements over the company’s plan to take itself private. This mass resignation leaves only one sitting member of the board, CEO and co-founder Anne Wojcicki.

Board Resignation and Background

Wojcicki proposed taking the company private in late July, after expressing interest in acquiring the company in April. The board’s Special Committee rejected her proposal, citing concerns that it did not provide a premium to the closing price and lacked committed financing. Despite this, Wojcicki was given a limited amount of additional time to revise her proposal. However, the board members stated that they had yet to receive a fully financed, fully diligenced, and actionable proposal that is in the best interests of non-affiliated shareholders.

Reasons for Resignation

In a letter to Wojcicki, the board members explained that they had differing views on the company’s strategic direction and believed it was in the best interests of the company and its shareholders to resign. They stated that they had not seen any notable progress in the past five months and believed that no such proposal was forthcoming.

Company Background and Financials

23andMe went public in 2021 after a special purpose acquisition company valued the company at around $3.5 billion. However, the company’s market cap has since declined to under $200 million, with the company’s stock price closing at 34 cents per share on Tuesday. The company was successful in its early days due to its at-home DNA kits, but struggled to maintain a stream of revenue as customers only made one-time purchases.

Company Challenges

23andMe faced a deficiency letter from the Nasdaq Listing Qualifications Department in November, notifying the company that it had 180 days to bring its share price to $1. In response, the board formed a Special Committee to consider paths forward. Wojcicki’s take-private proposal was seen as a way to address these challenges and provide a long-term solution for the company.

CEO Response

Wojcicki sent a memo to employees expressing her surprise and disappointment at the resignations, while doubling down on her commitment to taking the company private. She stated that she remains committed to the company’s customers, employees, and shareholders and believes that taking 23andMe private will be the best opportunity for long-term success.

Next Steps

Wojcicki has announced that the company will immediately begin identifying independent directors to join the board. She thanked the resigning directors for their service to the company and its shareholders.

Conclusion

The mass resignation of 23andMe’s board is a significant development for the company, which has been struggling to find its footing in the rapidly changing DNA testing market. While Wojcicki remains committed to taking the company private, the road ahead will be challenging. It remains to be seen whether the company can recover and find a path to success.

FAQs

Q: Why did the board members resign?
A: The board members resigned due to disagreements over the CEO’s plan to take the company private.

Q: What is 23andMe’s current market cap?
A: 23andMe’s current market cap is under $200 million.

Q: What is the company’s stock price?
A: The company’s stock price closed at 34 cents per share on Tuesday.

Q: Why is 23andMe taking itself private?
A: The company is taking itself private in an effort to address its financial challenges and provide a long-term solution for its shareholders.

Q: What is the Special Committee’s role?
A: The Special Committee was formed to consider paths forward for the company after it received a deficiency letter from the Nasdaq Listing Qualifications Department.