23andMe Board Quits As CEO Of DNA Testing Company Plans To Go Private
While originally hosting 8 members, all seven of its independent directors left the board as its chair and co-founder, Ann Wojcicki, remains adamant on taking the company private.
Alex.Haynes
The board of directors for 23andMe has quit following disagreements over the CEO’s plans to privatize the DNA testing company.
While originally hosting eight members, all seven of its independent directors left the board, as its chair and co-founder, Ann Wojcicki, remains adamant about taking the company private. According to The Hill, Wojcicki submitted a proposal in late July to stop the public trade of the company’s shares. Wojcicki initially expressed interest in doing so in April.
A special committee within the board rejected the proposal. They claimed it did not provide a premium to the closing price and that the plan did not have sufficient financing. As of Sept. 23, the company’s stock price decreased to 34 cents a share.
The board originally offered Wojcicki “limited” extra time to revise her proposal. However, the committee released a statement sharing their joint resignation upon not receiving an update.
“After months of work, we have yet to receive from you a fully financed, fully diligenced, actionable proposal that is in the best interests of the non-affiliated shareholders,” the board wrote. We believe the Special Committee and the Board have provided ample time for you to submit such a proposal. That we have not seen any notable progress over the last 5 months leads us to believe no such proposal is forthcoming…”
The statement continued, “[I]t is also clear that we differ on the strategic direction for the Company going forward. Because of that difference and because of your [Wojcicki’s] concentrated voting power, we believe that it is in the best interests of the Company’s shareholders that we resign from the Board rather than have a protracted and distracting difference of view with you as to the direction of the Company.”
Wojcicki co-founded the company in 2006. It gained popularity for its accessible, at-home DNA testing kits to help users learn their genetic history. However, the typical one-time purchase left the company struggling to grow and sustain its revenue.
Its financial issues came to a head in November 2023. The company received a letter of deficiency from the Nasdaq Listing Qualifications Department. The agency informed 23andMe of their 180-day deadline to bring their share price up to $1, leading to its current situation.
In response to the mass resignations, Wojcicki announced that she would “remain committed” to bringing 23andMe out of its financial decline.
“I remain committed to our customers, my employees and to our stockholders to achieve our goals,” she wrote. “I continue to believe that we will be better positioned to achieve our mission and goals outside of the short term pressures of the public markets and that taking 23andMe private will be the best opportunity for long term success.”
In the meantime, Wojcicki seeks to fill in the newly opened spots on the board.
She added, “We will immediately begin identifying independent directors to join the board. I want to thank the directors for their service to the company and its stockholders.”
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