23andMe Holding Co. (NASDAQ: ME) was a hot stock in late 2021, trading at $265. Today, it is heading toward zero as the company prepares to go bankrupt and its long-time CEO, Anne Wojcicki, steps down. Although their value is dubious, she will remain board chair and try to take control of the 23andMe assets. The company will try to operate through the process. It is hard to see how that can work.
23andMe Holding Co. (NASDAQ: ME) shares are headed toward zero as the DNA testing company prepares to go bankrupt.
The CEO wants to remain in control of the assets.
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The company started as a DNA testing company. People use the tests to find out where their families came from. The customer base stopped growing because people only needed to take the test once.
23andMe does have DNA information on 15 million people. If the database is sold, these people can “opt-out” to protect their privacy. Yesterday, Wojcicki said, “I remain committed to our long-term vision of being a global leader in genetics and establishing genetics as a fundamental part of healthcare ecosystems worldwide.” Since she was blamed for ruining 23andMe, that could be challenged in court.
Wojcicki tried to change the company from a DNA testing business for individuals to an enterprise company with a trove of data on millions of people that drug firms or scientists could use. Along the way, she fired almost the entire 23andMe staff. Even with the cuts, Wojcicki thought the company could develop drugs independently.
Wojcicki has tried to take 23andMe private in the past, which would have given her control of the assets. However, a special committee of the board rejected these, and the entire board resigned. Investors in 23andMe will get nothing. A bankruptcy largely protects the company from lawsuits, but the same cannot be said for Wojcicki.
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