23andMe is exploring strategic alternatives, looking to raise capital
Anne Wojcicki, co-founder and chief executive officer of 23andme Inc., during the South by Southwest (SXSW) festival in Austin, Texas, US, on Friday, March 10, 2023.
Jordan Vonderhaar | Bloomberg | Getty Images
Embattled genetic testing company 23andMe said on Tuesday that it’s started exploring strategic alternatives for a second time, which could include a sale of the company or its assets, a restructuring or a business combination.
The stock, which lost 82% of its value last year, fell 10% in extended trading and was briefly halted.
The announcement coincided with the release of 23andMe’s third-quarter results. Revenue in the company’s consumer services business dropped 8% to $39.6 million from $42.9 million in the same period last year.
The company said it will “need additional liquidity” to fund its operations, and it is looking to raise capital.
“Management has determined that there is substantial doubt about the Company’s ability to continue as a going concern,” 23andMe said in the earnings release on Tuesday.
CEO Anne Wojcicki has been trying to keep the company afloat. 23andMe is now worth less than $100 million, down from a peak of $6 billion.
In March, 23andMe’s independent directors formed a special committee to evaluate the company’s potential paths forward. Wojcicki submitted a proposal to take the company private in July, but it was rejected because it lacked committed financing and offered no premium to the closing share price at the time, the committee said.
The independent directors all resigned from 23andMe’s board two months later, citing disagreements with Wojcicki about the “strategic direction for the company.” Wojcicki has since appointed three new independent directors to its board, and 23andMe also said it planned to cut 40% of its workforce and shutter its therapeutics business as part of a restructuring plan.
On Tuesday, 23andMe said the special committee will oversee the search for strategic alternatives again, according to a release. The committee has selected Moelis & Company as its financial advisor and Goodwin Procter as its legal advisor.
There’s no guarantee that a deal will take place, the committee said. Wojcicki has repeatedly expressed her desire to take the company private, but it’s not clear if she will submit another proposal to do so.
23andMe declined to comment.
WATCH: The rise and fall of 23andMe
(L-R) Priscilla Chan, CEO of Meta and Facebook Mark Zuckerberg, and Lauren Sanchez attend the inauguration ceremony before Donald Trump is sworn in as the 47th US President in the US Capitol Rotunda in Washington, DC, on January 20, 2025.
Saul Loeb | Afp | Getty Images
Meta CEO Mark Zuckerberg praised the Trump administration for backing Silicon Valley on a call with investors, adding that 2025 will be big for “redefining” the company’s relationships with governments.
“We now have a U.S. administration that is proud of our leading companies, prioritizes American technology winning and that will defend our values and interests abroad,” Zuckerberg said Wednesday. “I am optimistic about the progress and innovation that this can unlock, so this is going to be a big year.”
Meta on Wednesday also agreed to pay $25 million to settle a lawsuit with President Donald Trump, according to NBC News. Trump sued Meta after the company suspended his Facebook and Instagram accounts following the insurrection at the U.S. Capitol on Jan. 6, 2021.
Zuckerberg and Meta have made several public efforts to smooth over relations with President Donald Trump since his victory in November. The company donated $1 million to Trump’s inaugural fund late last year, weeks after Zuckerberg dined with him privately at his Mar-a-Lago resort.
Earlier this month, Zuckerberg announced that Meta would eliminate third-party fact-checking to “restore free expression” to the company’s platforms. He said the fact-checkers had been “too politically biased” and “destroyed more trust than they’ve created, especially in the U.S.”
The move was widely recognized as a nod to Trump, as he and other Republicans have long claimed that Meta’s platforms like Facebook and Instagram censor conservative views. Zuckerberg and Trump have had an especially rocky relationship in the past, as Trump has previously threatened the tech executive with life in prison.
The company also elevated Joel Kaplan, former White House deputy chief of staff under President George W. Bush with longstanding ties to the Republican Party, to its chief policy role earlier this month.
Zuckerberg’s public concessions appear to be earning him some good will, as he attended Trump’s inauguration alongside other tech moguls like Tesla CEO Elon Musk, Google CEO Sundar Pichai and Amazon founder Jeff Bezos this month.
Shares of Meta were up slightly in extended trading Wednesday after the company reported fourth-quarter earnings that beat Wall Street’s expectations on top and bottom lines.
–CNBC’s Jonathan Vanian contributed to this report
WATCH: Meta beats on top and bottom lines, stock slips on Q1 revenue guidance
Mark Zuckerberg, CEO of Meta Platforms, demonstrates the Meta Quest Pro during the virtual Meta Connect event in New York on Oct. 11, 2022.
Michael Nagle | Bloomberg | Getty Images
Meta continues to lose billions of dollars developing the virtual reality and augmented reality technologies needed to underpin the nascent metaverse.
The social media giant reported fourth-quarter earnings Wednesday and said its Reality Labs unit recorded an operating loss of $4.97 billion while generating $1.1 billion in sales. Analysts were projecting that unit to log a fourth-quarter operating loss of $5.4 billion on $1.1 billion in sales.
Reality Labs is Meta’s unit that makes the Quest family of virtual-reality headsets and Ray-Ban Meta Smart Glasses.
Meta CEO Mark Zuckerberg kick-started his company’s VR endeavors in 2014 when it acquired the startup Oculus for $2 billion. Since then, Zuckerberg has characterized VR and AR as central to his plans to develop the futuristic digital world known as the metaverse, which he has said represent the next major computing platform.
Wall Street has questioned Zuckerberg’s metaverse investment. Reality Labs has tallied an operating loss of more than $60 billion since 2020, as of Meta’s fourth-quarter earnings report.
Meta last week said it would invest between $60 billion and $65 billion in 2025 capital expenditures to expand its computing infrastructure related to artificial intelligence. Zuckerberg has previously said AI is core to the company’s metaverse efforts, including its Ray-Ban Meta smart glasses. Meta develops that device with France-based EssilorLuxottica.
The social media company last year also unveiled its Orion prototype AR headset that is capable of overlaying digital objects on top of a person’s real field of view.
Meta released its latest VR headset, the $299 Quest 3S, during its September Connect event and pitched the device as a way for people to watch movies, play games and workout in VR.
Other tech companies are also investing in VR and AR.
Apple’s Vision Pro headset went on sale in the U.S. in February 2024 with a starting price of $3,499, and in December, Google and Samsung said they were working on a VR and AR device dubbed Project Moohan that will be available to buy in 2025 for an undisclosed price.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports10 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway