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The resignation of all seven independent directors from 23andMe, following protracted negotiations with CEO Anne Wojcicki, underscores the growing turmoil at the once-celebrated DNA-testing company. The board members expressed dissatisfaction with the absence of a “fully financed, fully diligenced, actionable proposal” that would serve the best interests of shareholders, further fueling uncertainty about the company’s future.
23andMe’s stock price plummeted to $0.30 per share, signaling deep financial instability. However, the company’s struggles are not related to the accuracy of its DNA testing, which has been widely regarded as reliable. Instead, its financial decline stems from an unsustainable business model. Wojcicki’s vision to monetize the company’s vast DNA database by developing drugs has largely been a money-losing venture, while her subscription model failed to gain traction. With customers only needing to purchase a DNA test once, generating recurring revenue has proven difficult.
The financial pressures intensified as the stock price dropped below the company’s cash reserves, and Wojcicki, holding 49% of voting power, blocked efforts to entertain offers from other potential buyers. This left the company with limited options, and the board’s mass resignation is a rare and dramatic move in corporate governance.
Wojcicki’s push to take the company private aims to shield it from public market pressures, allowing it to pivot toward new strategies, such as offering telehealth services that prescribe GLP-1 weight-loss drugs. Yet, whether this approach can revive 23andMe remains to be seen, given the previous setbacks in both business model experimentation and financial performance.
The resignation of the entire board leaves Wojcicki as the sole board member, heightening concerns about the future of the company. This leadership crisis comes at a time when 23andMe continues to face cash burn, with a real risk of running out of capital by next year.
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23andMe Board Resigns in New Blow to DNA-Testing Company
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