23andMe Board Departs, CEO Plans to Go Private

23andMe’s board of directors has resigned amid disagreements over the CEO’s plans to privatize the DNA testing company.

While the unique board consisted of eight members, all seven independent directors have left the board because its chair and co-founder, Ann Wojcicki, stays adamant about taking the corporate private. According to Wojcicki complex proposal in late July to halt public trading of the corporate’s shares. Wojcicki initially expressed interest in doing so in April.

A special committee of the board rejected the proposal. They argued that it didn’t provide a premium to the closing price and that the plan was not adequately funded. As of September 23, the corporate’s stock price had fallen to 34 cents a share.

The board originally offered Wojcicki “limited” additional time to improve her proposal. But the committee issued an announcement sharing a joint resignation after it had not received an update.

“After months of work, we have not received from you a fully funded, fully diligent, workable proposal that is in the best interests of the independent shareholders,” the board wrote. We consider that the Special Committee and the Board have provided you with ample time to submit such a proposal. The indisputable fact that now we have not seen any significant progress over the past 5 months leads us to consider that such a proposal is just not 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 (Wojcicki’s) concentrated voting power, we believe it is in the best interests of the Company’s shareholders for us to resign from the Board rather than have a prolonged and distracting disagreement with you on the direction of the Company.”

Wojcicki co-founded the corporate in 2006. It gained popularity with its reasonably priced, at-home DNA testing kits that helped users learn their genetic history. But the everyday one-time purchase made it difficult for the corporate to grow and sustain revenue.

Its financial problems got here to a head in November 2023. The company received a deficiency letter from the Nasdaq Listing Qualifications Department. The agency informed 23andMe of a 180-day deadline to raise its share price to $1, which led to the present situation.

In response to the mass resignations, Wojcicki announced that she would “remain committed” to pulling 23andMe out of its financial crisis.

“I remain committed to our customers, my employees, and our shareholders to achieve our goals,” she wrote. “I continue to believe that we will be better prepared to execute our mission and goals beyond the short-term pressures of the public markets, and that taking 23andMe private will provide the best opportunity for long-term success.”

Meanwhile, Wojcicki is trying to fill newly vacant positions on the board.

She added: “We will begin immediately identifying independent directors to join the board. I want to thank the directors for their service to the company and its shareholders.”