23Andme (NASDAQ: ME) stock plummeted more than 45% in pre-market trading Monday after the company filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate a court-supervised sale process for its assets.
Despite the filing, the genetic testing firm confirmed it will continue its operations while seeking potential buyers for its assets.
Mark Jensen, Chair and member of the Special Committee of the Board of Directors, said,
“After a thorough evaluation of strategic alternatives, we have determined that a court-supervised sale process is the best path forward to maximize the value of the business.”
This bankruptcy filing follows the rejection of a takeover bid from company co-founder Anne Wojcicki and her affiliates. Wojcicki has resigned as CEO but remains a board member.
Interim CEO Joe Selsavage explained that the bankruptcy filing will allow the company to address financial challenges, including cost reductions and outstanding legal liabilities. The company has also secured a $35 million debtor-in-possession financing commitment from JMB Capital Partners to support its ongoing operations.
23Andme (NASDAQ: ME) reassured customers that its data storage and privacy protections remain unchanged and will be a key consideration in any potential sale of the business.
The bankruptcy comes amid financial struggles and legal fallout from a 2023 cyber incident. The company intends to solicit bids over a 45-day period, with any deal subject to regulatory approvals.
