Wednesday, 1 June 2016

Elizabeth Holmes, Founder of Theranos, Falls From Highest Perch Off Forbes List



Elizabeth Holmes, the founder of the blood testing company Theranos, was a rare breed, something more rare than even the Silicon Valley unicorn she created: a self-made female billionaire. Forbes, the business publication that has made a franchise of cataloging the rich, had put Ms. Holmes on the top of its list last year of America’s richest self-made women.

The magazine’s new estimated tally of her wealth? It went from $4.5 billion to $0.

Ms. Holmes’s unusual status, as a young woman who created and controlled a company seemingly valued at about $9 billion, captivated the media: She graced countless magazine covers, including T: The New York Times Style Magazine. Theranos, she said, would revolutionize the lab industry by offering blood tests from a single finger prick at a fraction of the cost of traditional testing.

But over the last year, Theranos became the subject of a series of hard-hitting Wall Street Journal articles and intense regulatory scrutiny from an array of federal agencies.

The media is now mesmerized by Ms. Holmes’s fall. Truth be told, the half of the $9 billion valuation ascribed to Theranos and previously listed as Ms. Holmes’s wealth was nothing more than an estimate based on investors’ best guesses. Taking into account all the controversy and uncertainty surrounding the value of the company’s top-secret technology, Forbes is now guessing that the company is worth more like $800 million. While Ms. Holmes still owns at least half of the company, much of that value would be tied up with outside investors.

But, as an article in Forbes on Wednesday about Ms. Holmes is quick to acknowledge, no one really knows. Theranos has not let anyone really kick the tires. Ms. Holmes, 32, who has repeatedly vowed to reveal all, is now expected to present some data to the public in August at the annual meeting of the AACC, formerly the American Association for Clinical Chemistry. Even then, it may be impossible to come up with a better estimate of what her company is worth.

Not surprisingly, Theranos refused to shed any light on the matter, except to dispute Forbes’s analysis.

“As a privately held company, we declined to share confidential information with Forbes,” Brooke Buchanan, a company spokeswoman, said in an emailed statement. “As a result, the article was based exclusively on speculation and press reports.”

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