23andMe (NASDAQ:ME) shares jumped by nearly 41% today after its CEO, Anne Wojcicki, disclosed intentions to take the genetic testing company private.
The Intention
Wojcicki is also the co-founder and Board Chair of 23andMe. In a regulatory filing, the company disclosed that Wojcicki is considering making a proposal to acquire all outstanding shares of ME (that she does not currently own). Wojcicki already owns more than 20% of all outstanding shares in the company and controls nearly 49% of voting power.
The CEO has also indicated that she plans to maintain full control over 23andMe and is not willing to support any alternative transaction. Last month, 23andMe’s board set up a special committee made up of independent directors to review strategic alternatives aimed at maximizing value for the company’s shareholders. The special committee now plans to evaluate Wojcicki’s proposal “when and if” it is made available. Meanwhile, the special committee has roped in Wells Fargo as its financial advisor.
23andMe’s Challenges
The move from Wojcicki comes amid a freefall in 23andMe shares over the past three years. The company’s stock price has cratered from $13+ in November 2021 to the present $0.50 level. The stock plunged in value as the popularity of genetic tests faded. In the past, the company tried to boost its performance with a subscription model but the efforts failed to yield substantial results as customers generally need only a single genetics test. Now, Wojcicki is working with advisors to chalk up a potential take-private deal.
What Is the Target Price for 23andMe?
Meanwhile, analysts are cautiously optimistic about 23andMe stock with a Moderate Buy consensus rating. At the same time, the $1.24 average ME price target points to a nearly 248% potential upside in the stock.
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