In a surprising turn of events, all seven independent directors of 23andMe announced their resignation from the company’s board on Tuesday. CEO Anne Wojcicki expressed her shock and disappointment in a memo sent to employees, highlighting the unexpected nature of the directors’ departure.
Commitment to Going Private
Wojcicki, who co-founded the genetic-testing firm in 2006, reiterated her commitment to taking the company private, a strategy she believes is vital for its long-term success. 23andMe went public in 2021 through a special purpose acquisition company (SPAC), but since then, its share price has plummeted over 95%, significantly affecting its market valuation.
Rejection of Strategic Proposal
The directors had established a special committee in late March to explore various strategic options for the company. However, they rejected Wojcicki’s proposal to take 23andMe private, citing concerns that it did not offer a premium over the then-current share price of 40 cents. In their resignation letter, the directors indicated they had not received a “fully financed, fully diligenced, actionable proposal” that served the best interests of non-affiliated shareholders. They expressed frustration over what they perceived as a lack of progress in the company’s direction over the past five months.
Looking Ahead
Wojcicki acknowledged the challenges ahead and emphasized her belief in the need to transition to a private entity as the best path forward. She indicated that the company will soon begin searching for new independent directors to fill the vacancies left by the resignations.
Market Valuation Decline
Once valued at $3.5 billion, 23andMe’s market cap has now dwindled to below $200 million, with shares closing at just 34 cents on Tuesday. As the company navigates this tumultuous period, all eyes will be on how it plans to regain stability and confidence from investors.
