Elizabeth Holmes—and her company, Theranos—promised to change the way people got blood tests, replacing needles with finger pricks. In June, FORBES’ estimate of her net worth fell from $4.5 billion to $0. On October 5, Theranos got out of the business of drawing blood entirely. What happened?
June 2014: Holmes appears on the cover of Fortune with stunning news: Theranos, which she founded at age 19 in 2003, has 500 employees and is valued by its investors at $9 billion. She says she’ll change the blood testing business, later telling TedMed, “The individual is the answer to the challenge of healthcare.”
October 2014: That lofty Theranos valuation, confirmed by sources close to the company, lands Holmes on FORBES’ list of the 400 richest Americans. Because she owned half of Theranos, she had a net worth of $4.5 billion, all of it in shares in a privately held company that was not traded on any stock exchange.
October 2015: Questions swirled. At the FORBES Under 30 Summit in Philadelphia, Holmes shrugs them off. “The commentary in the press is 100% instigated by the lab industry,” she said. “We’re the only laboratory company that is really focused on transparency.”
October 2015: The Wall Street Journal publishes an investigation of Theranos by John Carreyrou alleging that only 15 of the 240 tests Theranos offers are conducted on the company’s signature Edison machines, and that its lab test results were sometimes inaccurate.
October 2015: Holmes’ response: double down. “First they think you’re crazy, then they fight you, and then, all of a sudden, you change the world,” she told Jim Cramer on CNBC. According to Vanity Fair, Theranos’ internal response to employees was more vulgar: a chant of “F*** YOU, CARREYROU!”
January 2016: The Centers for Medicare and Medicaid Services, which regulates Theranos, sends the company a letter saying that the company’s blood tests “pose immediate jeopardy to patient health and safety.” Theranos claims the issues pointed out by CMS are being fixed.
June 2016: FORBES lowers its estimate of Holmes’ net worth to zero. The $9 billion valuation was no longer credible in the wake of multiple investigations. We estimate that $800 million seems more reasonable. Because Holmes’ investors will get paid back before she does, her stake would be worth $0.
August 2016: Holmes presents Theranos data at the annual meeting of the American Association for Clinical Chemistry. But the data pertains to an entirely new machine. “Everything we’re interested in, they’re not talking about,” said one critic.
October 2016: Theranos lays off 340 people—43% of its staff—and exits the business of running a laboratory. Instead, Theranos will try to get the machines it showed in August approved by the Food and Drug Administration.