Connect with us

Published

on

Nasdaq Jeff Thomas Senior Vice President and Anne Wojcicki, 23andMe Co-Founder & CEO pose with an opening ceremony gift before the remote ringing of the NASDAQ opening bell at the headquarters of DNA tech company 23andMe in Sunnyvale, California, U.S., June 17, 2021.

Peter DaSilva | Reuters

Once worth $6 billion, 23andMe has lost 98% of its value and is on the verge of being delisted from the Nasdaq after all of its independent board members resigned in September. So what happened?

Founded in 2006, 23andMe set out to revolutionize the once very exclusive genetic testing business with a direct-to-consumer model. Thanks to capital from high-profile backers and celebrity endorsements, the company was able to market its test kits at affordable prices.  

Unlike competitors like Ancestry.com, 23andMe sought to leverage its database for drug discovery. The company went public in 2021 and was valued around $3.5 billion. The funding allowed 23andMe to develop its drug research team and spearhead partnerships with pharmaceutical companies.  

“We’re really at a point in time where I’m ready to explode,” 23andMe CEO Anne Wojcicki told CNBC in 2021. “There’s huge opportunities in therapeutics and huge opportunities in our consumer business.” 

Shortly after debuting on the Nasdaq, rising interest rates made it more difficult to raise funding, and sales began to fall. The company introduced a premium subscription product in 2020 that it hoped would make up for the lack of recurring revenue from its test kits, but that strategy failed to pan out. The company reported a $312 million net loss in the 2023 fiscal year, and by September 2023, 23andMe’s share price slid below $1.  

Besides the financial concerns surrounding 23andMe, privacy concerns around the company’s genetic database have also ramped up. In October 2023, hackers accessed the information of nearly 7 million customers.  

Asked by CNBC what would happen to 23andMe’s database if the company is sold or taken private, a company spokesperson said that Wojcicki has publicly shared that she intends to take the company private and is not open to considering third-party takeover proposals.

“Anne also expressed her strong commitment to customer privacy, and pledged to maintain the company’s current privacy policy, including following the intended completion of the acquisition she is pursuing,” the spokesperson said in an email.

Wojcicki submitted a proposal to take the company private in July, but it was rejected by a special committee formed by the company’s directors because the proposal did not provide a premium to the closing price of 40 cents per share at the time.

When 23andMe’s independent directors resigned in September, they cited frustration with Wojcicki’s “strategic differences” in her vision for the company.

Now, 23andMe faces a Nov. 4 deadline to keep its share price above $1 and locate new board members in order to remain listed on the Nasdaq. Watch the video above to learn more.  

Continue Reading

Technology

Zoom surpasses expectations and calls for another quarter of single-digit growth

Published

on

By

Zoom surpasses expectations and calls for another quarter of single-digit growth

Eric Yuan, founder and CEO of Zoom Video Communications, speaks at Concordia Annual Summit in New York on Sept. 25, 2024.

Leigh Vogel | Concordia Summit | Getty Images

Zoom shares were down 4% in extended trading on Monday after the video calling software maker announced strong fiscal third-quarter results and gave quarterly guidance that was just slightly above expectations.

Here’s how the company did in comparison with LSEG consensus:

  • Earnings per share: $1.38 adjusted vs. $1.31 expected
  • Revenue: $1.18 billion vs. $1.16 billion expected

Zoom’s revenue grew about 4% year over year in the quarter, which ended on Oct. 31, according to a statement. Zoom has increased revenue in the single digits for two and a half years, a sharp departure from 2020 and 2021, when the Covid-19 pandemic led the business to triple in size.

Net income, at $207.1 million, or 66 cents per share, was up from $141.2 million, or 45 cents per share, in the same quarter a year earlier.

The company reported 192,400 enterprise customers in the quarter, up 800 customers from the previous quarter.

With respect to guidance, Zoom called for $1.29 to $1.30 in fiscal fourth-quarter adjusted earnings per share on $1.175 billion to $1.180 billion in revenue. Analysts surveyed by LSEG were expecting $1.29 per share and $1.17 billion in revenue.

Zoom bumped up its view for the 2025 fiscal year. It expects $5.41 to $5.43 in adjusted earnings per share, with $4.656 billion to $4.661 billion in revenue. The middle of the revenue range implies about 3% growth.

LSEG’s consensus was $5.35 per share on revenue of $4.64 billion. In August, Zoom said it was looking for $5.29 to $5.32 per share and revenue between $4.63 billion and $4.64 billion.

During the quarter, Zoom said in the first half of 2025 it will release a premium Custom AI Companion that could connect to corporate glossaries and services such as ServiceNow and Workday. Zoom also started offering single-use webinar options, with room for up to one million attendees.

As of Monday’s close, Zoom stock was up about 24% this year, while the S&P 500 index had gained 25%.

The company also said its corporate name is changing from Zoom Video Communications to Zoom Communications Inc.

“This change reflects our evolution into an AI-first work platform for human connection and our vision for long-term growth,” Zoom’s founder and CEO Eric Yuan said on a conference call with analysts.

Don’t miss these insights from CNBC PRO

Zoom deserves another look from investors despite its weak growth, says MAI Capital's Chris Grisanti

Continue Reading

Technology

San Francisco Mayor-elect Daniel Lurie taps OpenAI’s Sam Altman and other business leaders for help with transition

Published

on

By

San Francisco Mayor-elect Daniel Lurie taps OpenAI's Sam Altman and other business leaders for help with transition

Mayor- Elect Daniel Lurie speaks in St. Mary’s square a day after winning the Mayoral race in San Francisco on Friday, Nov. 8, 2024.

Gabrielle Lurie | San Francisco Chronicle | Hearst Newspapers | Getty Images

San Francisco’s Mayor-elect Daniel Lurie has begun tapping tech heavyweights and business leaders to help with his goal of overhauling the city’s image. His transition team includes OpenAI CEO Sam Altman and former Twitter CFO Ned Segal.

Lurie, a centrist Democrat and Levi Strauss heir, ousted incumbent London Breed in a closely-watched race and will step into the role in 2025. San Francisco-based companies need to invest in the city and commit to their communities, Lurie told CNBC in an interview. He named both Visa and Salesforce as models for this “two-way street.”

“I’ve had great conversations with Sam Altman,” Lurie said. “He wants to put down roots here in San Francisco. We want to lean into being the home of AI, which we are, and I will continue to invest in that.”

The city can’t have all its eggs in one basket and needs to expand into other business sectors as well, Lurie said.

“We will go recruit companies from all sectors to come back to San Francisco,” Lurie said. “Whether it’s healthcare, whether it’s technology [or] whether it’s arts and culture, we want to be the number-one spot for business again in this country.”

Lurie, who founded the homelessness nonprofit Tipping Point, has plans that include declaring a state of emergency over the fentanyl crisis on day one in office and a previously disclosed proposal to build 1,500 shelter beds within his first six months in office. A fully-staffed police department and 911 dispatch office will be necessary to help bring businesses and workers back to the city, Lurie said.

“We need to make sure we get our behavioral health crisis under control, which means we need to build more mental health and drug treatment beds,” Lurie said. “We have to get people off the streets. We have to do that compassionately, but we also have to send a message — and we are — to the country and to the world that San Francisco is no longer a place that you come to deal drugs or to do drugs or to sleep on our streets.”

Lurie added, “We didn’t get into this overnight, and it won’t be fixed overnight.”

San Francisco mayoral candidate Daniel Lurie on homelessness plan

Part of the solution he envisions will be bringing workers back to offices, modeling that goal with his administration. Lurie says his team will be in five days a week, and he hopes that the administration’s work in cleaning up streets will entice others to do the same. More affordable housing will also be a priority to ensure workers can afford to live in the city, he said.

He’s also hopeful that future events the city will host in the next year and a half — from the JPMorgan Healthcare Conference to the 2025 NBA All-Star Game and Super Bowl LX in 2026 — will help invigorate the city.

“I’ve talked to Jamie Dimon,” Lurie said. “I talked to the commissioner of the NBA. They all want San Francisco to come back.”

Lurie’s election is part of a wider trend in the state of moving to the right of progressive policies and leaders of the past. More conservative district attorneys were voted into office in major counties, including Nathan Hochman in Los Angeles, while Alameda county District Attorney Pamela Price and Oakland Mayor Sheng Thao faced successful recalls. California voters also adopted a proposition that increases penalties for certain drug and theft crimes while rebuffing a measure to raise the state’s minimum wage to $18 an hour. Up and down the state, voters’ focus was on the economy, according to polling from the Public Policy Institute of California, which found the economy, cost of living and inflation were the key issues for 35 percent of voters this cycle . 

“In some ways it’s remarkable that California remained as much of a blue state and Democratic stronghold as it is considering the way people were feeling about their own financial circumstances, especially compared to four years ago,” Mark Baldassare, PPIC’s survey director, said.

This comes as California Gov. Gavin Newsom has convened a special legislative session next week in an effort to prepare the state and safeguard policies around climate change, reproductive rights and more ahead of President-elect Donald Trump’s return to the White House in January.

Lurie told CNBC that he disputes the “shift to the right” narrative in the city, adding that his biggest challenge will be combatting the cynicism around what San Francisco has become.

“What we have done in San Francisco is get back to common sense with this election,” Lurie said. “It’s about getting results for the people of San Francisco — allowing people to struggle and die in our streets is not progressive.”

Continue Reading

Technology

Intel and Commerce Department close to finalizing roughly $8 billion CHIPS Act grant, source says

Published

on

By

Intel and Commerce Department close to finalizing roughly  billion CHIPS Act grant, source says

Intel CEO Patrick Gelsinger speaks prior to President Joe Biden’s remarks at Intel Ocotillo Campus on March 20, 2024 in Chandler, Arizona. 

Rebecca Noble | Getty Images

Chipmaker Intel and the CHIPS Act Office are close to finalizing a deal which would award the company a roughly $8 billion grant, according to a person familiar with the matter, as the Biden administration moves to dole out funds before President-elect Trump’s inauguration.

That $8 billion will go towards Intel’s factory-building efforts, said the person. The Commerce Department is expected to finalize the awards in the coming weeks, the person said.

Intel is also in line for a $3 billion contract to manufacture chips for the Department of Defense, a deal announced in September and a rare bright spot in the company’s struggling efforts to grow its fab business. The Commerce Department and Intel declined to comment on the matter.

The Wall Street Journal first reported that the two sides were close to finalizing the grant.

But Intel’s struggles have intensified since the grant was initially announced. The New York Times, citing four people familiar with the matter, reported Sunday that the government had decided to decrease the grant by roughly $500 million due to uncertainties about Intel’s ability to execute on its investment commitment, and because of Intel’s shifting technology roadmap and customer demand.

The U.S. awarded Taiwan Semiconductor Manufacturing Company a $6.6 billion grant earlier this month, raising investor expectations that cash funding for Intel would come soon. Intel has benefited from CHIPS Act tax breaks but has not yet received cash awards, something which Intel CEO Pat Gelsinger has expressed dissatisfaction with.

“We’re frustrated that hasn’t moved faster,” Gelsinger told CNBC in October, referring to the CHIPS Act grants. “They’ve been too bureaucratic in that process. We’re anxious to see those finished.”

U.S. House Speaker Mike Johnson had previously said he might look to repeal the bipartisan CHIPS Act, but he then walked back those comments. The Biden administration and grant awardees have touted the legislation as a job-creating machine.

Intel’s struggles have increased significantly this year. The company posted a nearly $17 billion loss last quarter and has been dialing back CEO Pat Gelsinger’s ambitious plans worldwide.

Intel announced earlier this year it would trim back 15,000 jobs via layoffs and voluntary buyouts. It has made moves to make its foundry business more easily separable from its legacy business, and has been working with advisors on activist defense and a broader strategic review, people familiar with the matter previously said. Intel is also seeking to raise cash via a minority stake in the Altera business, CNBC previously reported, and has been sounding out interested acquirers for weeks.

It may also be staring down a once-unthinkable prospect: a potential takeover bid from an ascending Qualcomm, which has a market cap that now dwarfs Intel’s.

WATCH: We got a lot done this quarter, Intel CEO says

We got a lot done this quarter, says Intel CEO Pat Gelsinger

Continue Reading

Trending