All seven independent directors of 23andMe’s board resigned on Tuesday, citing disagreements over the chief executive’s plan to take the company private.
The departures leave just one sitting member of the board, its chair, Anne Wojcicki, who co-founded the genetics-testing company in 2006 and serves as its chief executive officer.
Wojcicki submitted a proposal in late July to take the company private, after earlier expressing interest in acquiring the company back in April. The board’s Special Committee rejected her proposal, noting it didn’t provide a premium to the closing price at the time of 40 cents per share and it lacked committed financing.
The Special Committee gave Wojcicki a “limited amount of additional time” to revise her proposal to take the company private.
In their letter Tuesday, however, the board members wrote, “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.”
“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 letter continued, adding that there would be no further extensions to revise such a proposal.
The directors, who largely did not support the plan to take the company private, said it “is clear that we differ on the strategic direction for the Company going forward” and said they thought it was in the best interests of the company and its shareholders to resign, “rather than have a protracted and distracting difference of view with you as to the direction of the Company.”
The company went public in 2021, when a special purpose acquisition company valued it at around $3.5 billion, CNBC reported. The company now has a market cap of under $200 million and closed at 34 cents per share on Tuesday.
The company was tremendously successful after first entering the mainstream because of the at-home DNA kits that provided insight into people’s genetic history. The company struggled to maintain a steady stream of revenue, however, since the at-home kits only require customers to make a one-time purchase.
After receiving a deficiency letter from the Nasdaq Listing Qualifications Department in November 20, notifying the company that it had 180 days to bring the share price to $1, the board formed the Special Committee to consider paths forward.
Wojcicki sent a memo to employees on Tuesday saying she was “surprised and disappointed” by the resignations and doubling down on her commitment to taking the company private.
“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.”
“We will immediately begin identifying independent directors to join the board,” she continued. “I want to thank the directors for their service to the company and its stockholders.”