Anne Wojcicki, CEO of 23andMe, is contemplating a move to take the genetic testing company private. This decision comes as the company's stock price has experienced a sharp decline of over 95% from its peak in 2021.
At the time, Wojcicki is actively engaging with advisors and initiating discussions with potential financing sources and partners, as revealed in a recent filing with the U.S. Securities and Exchange Commission.
Wojcicki Stresses the Need For Company Control
In her pursuit to privatize the company, Wojcicki expresses her desire to retain control over 23andMe. According to the filing, she is not inclined to support any alternative transaction and is committed to preserving her influence within the company.
Related Article : DNA Testing Companies Adopt 2-Factor Authentication in Response to 23andMe Data Breach
23andMe Has a Difficult History of Achieving Target Revenues
Founded in 2006 by Wojcicki, 23andMe gained widespread recognition for its at-home DNA testing kits, offering customers insights into their ancestry and genetic makeup.
Despite its initial success, the company faced hurdles in sustaining recurring revenue, especially as consumers typically only require one DNA test to obtain their results. Following its public debut in 2021 through a merger with a special purpose acquisition company, 23andMe has encountered difficulties in maintaining its stock value.
Current Stock Situation
As of Thursday morning, 23andMe's stock is trading at approximately 45 cents per share. The company received a deficiency letter from the Nasdaq Listing Qualifications Department in November, prompting efforts to raise its share price above $1 within 180 days.
In response, a Special Committee was formed in March to explore strategies to boost the stock's performance.
"The Special Committee will carefully review Ms. Wojcicki's proposal when and if it is made available and evaluate it in light of other available strategic alternatives, including continuing to operate as a publicly traded company. The Special Committee is committed to acting in the best interests of 23andMe and its shareholders," the committee said in the release
Furthermore, the Special Committee acknowledges Wojcicki's interest in acquiring all outstanding shares of 23andMe. With Wojcicki already owning shares representing over 20% of the outstanding shares and approximately 49% of the voting power, the committee is evaluating her proposal.
Wells Fargo has been engaged as the financial advisor to assist in this process, although there is no guarantee that Wojcicki's offer will lead to the desired outcome, CNBC states in its report.
Data Breach That Made 23andMe Controversial
In late December 2023, 23andMe confirmed that its system had been hacked. At the time, the data of 6.9 million users were in danger of getting compromised.
However, instead of acknowledging its weakness in failing to secure the confidential data of millions of people, 23andMe blamed the victims, downplaying their concerns to the cyberattack.
According to a lawyer who represents the victims, the genetic-testing company left them "dry" while neglecting the consequences of the breach.
