Time to swab the deck. 23andMe went from $6 billion to less than zero after three years as a public company. Anne Wojcicki is now hoping to take DNA-testing company private so she'll have time to possibly right the ship, free from the scrutiny brought on by public or activist shareholders.
Barnes & Noble, Dell Computers, Panera Bread, Burger King and H.J. Heinz...those are some notable companies that have gone private in past years. Most were struggling companies when they went private, and a few including Dell and Burger King eventually went public again (Panera will soon join them later this year). 23andMe plans to join that group. While it's way too early to tell whether the company will go public again further down the line, one thing is clear - Anne Wojcicki wants to stay in control.
How did 23andMe fail the spit test? The beginning of the end of its stock price began after a data breach last year exposed personal information from nearly 7 million customers’ profiles, which has the company facing more than 30 lawsuits. But, even before then, 23andMe's biggest problem was its inability to turn a profit. And it hasn't been able to expand beyond its one-trick pony consumer DNA kits, which have been in decline since 2019.
While it's been evolving the business and marketing away from ancestry and focusing more on health, 23andMe has continued to bleed money with revenue plunging 33% in the fiscal third quarter, falling from $67 million to $45 million compared to the same period last year. This decline was accompanied by a significant widening of its net loss, which ballooned to $278 million from $92 million in the prior year's third quarter.
Going private does have some advantages including not having to deal with costly and time-consuming regulatory, financial reporting, corporate governance and disclosure requirements. That may allow 23andMe the flexibility and time to shift from a company that just provides genetic tests to a more comprehensive health care company https://lnkd.in/g6YXcWSj #23andme #biotech #dna #healthcare #stockmarket #investments #ancestry
Entrepreneur, SVP & Health Services & Technology Practice Lead
2mowell done Kat Stout!