Tags: elizabeth holmes | theranos | forbes | fortune

Elizabeth Holmes' Theranos-Based Forbes Fortune Goes Poof

Image: Elizabeth Holmes' Theranos-Based Forbes Fortune Goes Poof

Elizabeth Holmes speaks at last year's Forbes Under 30 Summit in Philadelphia. (Photo by Lisa Lake/Getty Images)

By    |   Thursday, 02 Jun 2016 07:03 AM

Elizabeth Holmes, founder of controversial blood-testing firm Theranos, has seen her Forbes-listed billion-dollar fortune go poof as federal investigators sort through questions about her company.

On Wednesday, Forbes said Holmes, who topped its list of America's richest self-made woman in 2015 at $4.5 billion, dropped in net worth to zero in light of recent problems. The magazine said her wealth estimate was based on her 50 percent stake in the troubled Theranos.

"Since (2015), Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies," said Forbes. "That, plus new information indicating Theranos' annual revenues are less than $100 million, has led Forbes to come up with a new, lower estimate of Theranos' value."

Forbes said it made its decision after conversations with "a dozen venture capitalists," saying the company itself is worth about $800 million, not the previously estimated $9 billion, including intellectual property.

"It also represents a generous multiple of the company's sales, which Forbes learned about from a person familiar with Theranos' finances," the magazine wrote. "At such a low valuation, Holmes' stake is essentially worth nothing. Theranos investors own preferred shares, which mean they get paid back before Holmes, who owns common stock."

Brooke Buchanan, a Theranos spokeswoman, told Time magazine in a statement that the Forbes information was "skewed" because it did not have important data about the company.

"As a privately held company, we declined to share confidential information with Forbes," Buchanan told Time. "As a result, the article was based exclusively on speculation and press reports."

CNN Money said Holmes, who had attended Stanford University before dropping out, founded Theranos in 2003 at 19. Holmes "raised millions" by saying her company could "quickly process the full range of laboratory tests from a few drops of blood," said CNN.

Theranos was slammed by a Wall Street Journal article in October, which charged that it did limited tests with its own equipment. That has been followed by investigations from the Centers for Medicare and Medicaid Services, the Securities and Exchange Commission, and the Justice Department.

In May, the company was hit with two lawsuits charging false marketing and inaccurate blood tests, noted CNN.

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Elizabeth Holmes, founder of controversial blood-testing firm Theranos, has seen her Forbes-listed billion-dollar fortune go poof as federal investigators sort through questions about her company.
elizabeth holmes, theranos, forbes, fortune
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2016-03-02
Thursday, 02 Jun 2016 07:03 AM
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