23andMe CEO Anne Wojcicki has proposed taking the genetic testing company private, as the stock price remains below $1.
According to a recent filing with the U.S. Securities and Exchange Commission (SEC), Wojcicki is prepared to buy all outstanding shares of 23andMe’s common stock for 40 cents per share in cash. This offer represents an 11% premium compared to the company’s closing stock price in April.
Wojcicki, who co-founded 23andMe in 2006, initially voiced her intent to take the company private in April, stating in her proposal that she would “not be willing to support any alternative transaction.” The filing also notes her intention to complete the transaction “as promptly as possible.”
Challenges Facing 23andMe
23andMe became widely recognized for its at-home DNA testing kits, which provide users with insights into their family histories and genetic profiles. The company went public in 2021 through a merger with a special purpose acquisition company (SPAC), at which time it was valued at approximately $3.5 billion.
However, the company has faced challenges in sustaining consistent revenue streams, primarily because customers typically only need to use its DNA testing services once to receive their results. This issue has contributed to a more than 95% drop in the company’s stock price since its public debut.
Wojcicki’s Vision for 23andMe as a Private Company
In her proposal, Wojcicki emphasized the drawbacks of being a public company, particularly the “short-term focus of the public markets,” which she believes have distracted the company from its mission. She argued that taking 23andMe private would allow the company to remove certain public company costs and distractions, potentially positioning it better for long-term success.
The company also recently faced regulatory challenges. In November, 23andMe received a deficiency letter from the Nasdaq Listing Qualifications Department, stating that the company had 180 days to bring its share price back above $1 to comply with listing requirements. In response, the company’s board of directors formed a Special Committee in late March to explore various options to enhance the stock’s performance.
This Special Committee is now tasked with reviewing and deciding on Wojcicki’s proposal to take the company private.
Featured Image courtesy of Smith Collection/Gado via Getty Images
Follow us for tech news updates.