23andMe Directors Resign as CEO Anne Wojcicki Pursues Plans to Take Company Private

All independent directors of 23andMe resigned from the board this week, marking a significant challenge for the genetic-testing firm. The resignations followed prolonged discussions with CEO and co-founder Anne Wojcicki, who aims to take the company private. In a letter to Wojcicki, the seven directors stated they had not received a "fully financed, fully diligenced, actionable proposal" in the best interests of non-affiliated shareholders.

Despite their belief in 23andMe's mission, the directors decided to resign immediately due to Wojcicki's concentrated voting power and differing views on the company's future. Wojcicki responded in a memo to employees, expressing surprise and disappointment over their decision. She maintained that taking the company private would benefit its long-term prospects by removing short-term public market pressures.

Company's Financial Struggles

23andMe has faced challenges since going public in 2021, struggling to establish a profitable business model. The company reported a net loss of $667 million for its last fiscal year, more than double the previous year's $312 million loss. Its stock has also suffered significantly, closing at 33 cents on Thursday, down over 97% since its market debut.

Wojcicki announced plans in April to take 23andMe private by acquiring all outstanding shares she doesn't own. She expressed her desire to maintain control of the company and rejected alternative offers from other bidders. As of Thursday, Wojcicki was the only remaining board member listed on the company's website.

Privacy Concerns and Legal Challenges

Beyond board resignations, 23andMe has faced scrutiny over privacy issues. Recently, it agreed to pay $30 million to settle a class-action lawsuit related to a 2023 data breach that exposed customer information. The settlement awaits judicial approval next month. A spokesperson stated that $25 million of the settlement is expected to be covered by insurance.

The company expressed preliminary support for the settlement, believing it serves customers' best interests. A spokesperson added that they look forward to finalising the agreement soon. Meanwhile, efforts are underway to identify new independent directors for the board.

A spokesperson had no further updates when contacted by The Associated Press. Despite these challenges, Wojcicki remains committed to steering 23andMe through its current difficulties and towards a more stable future.