All seven independent directors on 23andMe's board resigned on Tuesday, citing differences over the CEO's plan to take the company private.
The departures leave the board with just one current member: Chairwoman Anne Wojcicki, who co-founded the genetic-testing company in 2006 and serves as its chief executive officer.
Wojcicki submitted a proposal to take the company private in late July. Showing interest The special committee of the board of directors that acquired the company in April Rejected She noted that her proposal offered no premium to the then-closing price of 40 cents per share and that committed financing was insufficient.
The special committee gave Wojcicki “limited additional time” to revise his proposal to take the company private.
But in Tuesday's letter, board members wrote that “after months of work, we have yet to receive a fully funded, fully considered and actionable proposal that is in the best interests of our unaffiliated shareholders.”
“We believe that the special committee and the board have allowed sufficient time for your company to submit such a proposal. Given the lack of significant progress over the past five months, we believe that no such proposal will be made going forward,” the letter continued, adding that there would be no further extension to amend such a proposal.
The directors, who largely did not support the company's plans to go private, said it was “clear that we have different views about the company's strategic direction going forward” and that they believed it was in the best interests of the company and shareholders for them to step down “rather than causing prolonged and disruptive disagreements with you about the company's direction.”
The company is slated to go public in 2021, with a special purpose acquisition company valuing the company at about $3.5 billion, CNBC reported. ReportedThe company's market capitalization is currently just under $200 million and closed at 34 cents a share on Tuesday.
The company has seen great success since it first entered the mainstream with its at-home DNA kits, which provide information about people's genetic history. But because at-home kits are a one-time purchase for customers, it has struggled to maintain a steady revenue stream.
After receiving Defect Notice On November 20, the Nasdaq Listing Qualifications Department notified the company that it must raise its stock price to $1 within 180 days, and the company's board of directors established a special committee to consider next steps.
Wojcicki is Note He told employees on Tuesday he was “surprised and disappointed” by his resignation and reiterated his commitment to taking the company private.
“I remain committed to achieving our goals for our customers, employees and shareholders,” she wrote. “I continue to believe that we will be better positioned to achieve our mission and goals away from the short-term pressures of the stock market, and I am confident that taking 23andMe private provides us with the best opportunity for long-term success.”
“We will immediately begin the process of selecting independent directors to join the board,” she continued. “I would like to thank the directors for their contributions to the company and its shareholders.”
