Mass Exodus: 23andMe's Entire Board Resigns... (Shares Plummet to Pennies)

You know it’s a bad day at the office when your entire board of directors rage-quits. And that’s exactly what went down with 23andMe on Tuesday. Yep, every single independent director hit the "peace out" button after months of back-and-forth with Wojcicki over her plan to scoop up the company at $0.40 a share (which, fun fact, is a 25% premium over what it was trading at).

(Source: Wall Street Journal) 

However, the board still decided to throw in the towel. Why? Because, according to them, her bid wasn’t “fully financed, fully diligenced, or actionable.” Translation: it wasn’t worth the paper it was printed on.

(Source: Giphy) 

So the board did what any group of fed-up adults would do: they quit. Their resignation letter basically boiled down to, “This is going nowhere, and we’ve got better things to do than watch this ship sink.”

So how in the Hail Mary did 23andMe end up in this dumpster fire? Oh, just your standard SPAC magic trick. The company went public in 2021 with a $3.5 billion valuation, which was clearly based on everyone’s fever dreams because the stock now sits at $0.34. You read that right—thirty-four cents. That’s roughly about the same amount of change I have sitting on my office desk as I write this. 

(Source: Giphy) 

This has the company currently sitting at a nice market cap of about $177 million (which, let’s be honest, is barely enough to buy a couple of decent yachts for the board members who just ghosted) - which means exactly what it sounds like: the company is in deep sh^t. 

Revenue? Down 34% last quarter. Cash on hand? $170 million, but they’re burning through it like they’re trying to win some kind of corporate bonfire contest. Oh, and they’re $69 million in the hole for the quarter.

(Source: Wall Street Journal) 

In addition (or should I say adding insult to injury), 23andMe is legit on the verge of getting  delisted from the Nasdaq unless they can pull off a miracle and get their stock price back over $1 by November 4 (shares have plunged -63.14% YTD). So, yeah, it’s not exactly smooth sailing over in Mountain View, California.

(Source: Investing.com) 

On the other hand though, despite the walkout, Wojcicki is still super committed to taking 23andMe private. In a memo to employees (you know, the people who haven’t quit... yet), she said she was “surprised and disappointed” by the board’s dramatic exit. Especially considering Wojcicki’s whole pitch going private was that it would give 23andMe the breathing room it needs to figure out how to stop bleeding cash without the pesky public markets breathing down their neck. 

However, even with the board's abandonment, she still controls nearly half of the company’s voting power, so it’s not like she’s gonna be ousted anytime soon. But it’s still a bold move when the company is essentially a penny stock with a 12 million-person DNA database that’s way more valuable than its actual stock price.

(Source: Giphy) 

So, given this, where does 23andMe go from here? Well, analysts are scratching their heads because, let’s be honest, it’s not looking great. Brad Loncar, a guy who knows a thing or two about biotech stocks, summed it up nicely: “A go-private deal seemed like the best—and maybe only—way out for 23andMe, but Wojcicki hasn’t been able to get it done, and now she’s lost her board.” Translation: 23andMe is circling the drain, and the only person left to catch it is the one who dropped the ball in the first place.

Anne Wojcicki Practicing Her “Catching” Skills (Source: ABC News) 

Loncar also floated the idea that 23andMe could get snatched up by a bigger player, mainly because that 12 million-person DNA database is a goldmine for anyone who knows what to do with it. However, so far, attempts to monetize it through drug development have been crazy expensive and largely unsuccessful. 

So clearly, it’s been more of a costly experiment than a massive cash cow… but still, 12 million DNA samples could be extremely lucrative if given into the right hands. And right now, the right hands ain’t 23andMe. 

(Source: QZ) 

And I’m not just saying that either. The company has also recently laid off about 20% of its workforce as they are shutting down their clinical programs to save some cash, but according to analysts, they’ve only got enough runway to last about a year. So, unless Wojcicki’s got some next-level trick up her sleeve, the clock is ticking, and it’s not looking great.

(Source: Giphy) 

But, but, but… looking ahead Wojcicki, for her part, is still putting on a brave face and telling employees she’s committed to the company’s mission (which she’s been at for 18 years, by the way). Whereas, the goal is to form a new independent board that aligns with her thinking, which is very cutesy and demure on paper, but in reality… for both the board and the company as a whole, it's pretty much nothing but wishful thinking at this point.

(Source: Wired) 

TL;DR: 23andMe’s board just noped out after months of trying to get on the same page as Wojcicki, who’s dead set on taking the company private. The company’s stock is in the toilet, they’re at risk of getting delisted from Nasdaq, and the future is about as clear as a Magic 8-Ball answer. With layoffs, huge losses, and a ticking cash clock, analysts are saying it’s anyone’s guess how long 23andMe can keep this DNA-fueled roller coaster going. *sigh*

As always stay safe and stay frosty, friends! Until next time… 

P.S. It’s Official: we will be officially releasing a brand new explosive alert to premium members ONLY today at 4pm EST! Click here for the details to ensure you’re in on the action before things get crazy… 

Stocks.News holds no positions in companies mentioned in the article.