Seven of eight members of 23andMe’s board resigned one more stroke to the struggling genetics company. The CEO is now the only remaining member.
The independent directors of the genetic testing firm have in a letter posted on Tuesday that they are leaving the company’s board after not receiving a satisfactory buyout offer from the CEO, Anne Wojcicki.
“After months of work, we have yet to receive from you a fully funded, fully diligent, workable proposal that is in the best interest of the non-affiliated shareholders,” the seven directors, including the CEO of YouTube , said in a letter to the company’s co-founder and CEO.
In a memo to employees reported by the Wall Street JournalWojcicki responded: “I am surprised and disappointed by the decision of the directors to resign.” She insisted taking the company private was still the best strategic option and said she would conduct a search for new board members.
Wojcicki, who has been trying to take the company private since April, proposed to acquire all outstanding shares of 23andMe not owned by her or her affiliates in July for $0.40 a share. She controls 49% of voting shares in the company.
A special committee constituted by the company rejected the proposal as it was deemed insufficient and not in the best interest of the non-affiliated shareholders. They also said that the special committee was not prepared to consider further expansions and that the company’s board agreed with that.
“That we have not seen any significant progress over the last 5 months leads us to believe that no such proposal is on the table,” the directors added. Wojcicki said earlier this month that she would be open to considering third-party takeover proposals for the company.
23andMe’s share price fell to a new low of $0.30 in response to the board’s mass layoffs, and returned to $0.35 the next day. According to WSJ, the company is now worth less than the cash it has in its reserves. Financial publications have begun calling 23andMe a penny stock.
23andMe, best known for its saliva-based test kits that offer users a glimpse into their genetic ancestry, became public in 2021. Since then, it has never turned a profit, and the company is in danger of completely burning through its cash reserves by next year. Throughout 2023 and 2024, 23andMe also struggled with the consequences of a disastrous hack which saw the personal information of nearly 7 million users stolen.
