23andMe (ME) CEO Anne Wojcicki has submitted a proposal to take the genetic testing company private as its stock price struggles to stay afloat. She’s prepared to buy all of 23andMe’s outstanding shares of common stock for 40 cents per share, according to a Wednesday filing with the SEC.
The Bold Move to Go Private
In a bold move, Wojcicki aims to buy out the remaining shares to take the company off the public market. This offer comes at an 11% premium to 23andMe’s closing stock price from April. “Our experience with the short-term focus of the public markets has led me to believe that the Company will be best equipped to execute against this mission as a private entity,” Wojcicki wrote in her proposal.
23andMe’s Struggles and Setbacks
Since going public in 2021 through a merger with a special purpose acquisition company (SPAC) valued at $3.5 billion, 23andMe’s stock has plummeted over 95%, now trading at $0.40. The company has faced numerous challenges, including a decline in DNA test sales and the end of an exclusive research partnership with GlaxoSmithKline (GSK), according to MedTech Dive.
A New Path Forward?
According to the filing on Wednesday, the special committee formed by 23andMe’s board, consisting of independent directors, will need to approve or reject Wojcicki’s proposal. The committee is also considering other strategic options, such as continuing to operate as a public company or potentially splitting the business into consumer and therapeutics segments.
Financial and Legal Concerns
Adding to the financial pressures, 23andMe’s revenue dropped about 33% year-over-year to $44.7 million in the Fiscal third quarter ending December 31. The company also faces multiple lawsuits following a data breach last year that affected 6.9 million customers.
Analyst Perspectives on 23andMe
TD Cowen analysts see Wojcicki’s proposal as the “new most likely outcome,” considering the mixed investor interest in the company’s consumer and biotech arms. “A potential business split, which has been previously discussed, remains on the table in our view,” analysts wrote in a Thursday research note.
Wojcicki’s commitment to taking the company private reflects her belief that 23andMe can better navigate its mission away from the public eye. As she works with advisors and seeks potential partners, the decision now lies in the hands of the special committee to determine the future of 23andMe.
What Is the Price of ME Stock?
Over the past year, ME stock has declined by 78%. It is now sitting at $0.40. Analysts are likely to revise their ratings on the stock following this news.
