Theranos, the beleaguered blood-testing company that’s become a cautionary tale for blind Silicon Valley exuberance, is dissolving.
The Wall Street Journal’s John Carreyrou—whose 2015 expose (paywall) led to government investigations into Theranos and its founder and former CEO Elizabeth Holmes—reported today (Sept. 4) that it aims to pay creditors its remaining cash, citing a shareholder email (paywall).
Just a few months prior, Theranos had laid off most of its remaining staff to about two dozen people (paywall) in April—down from 800 in 2015—to stave off bankruptcy after securing a $100 million loan at the end of 2017.
Theranos had raised more than $700 million from prominent investors—including the family of US secretary of education Betsy DeVos, the heirs of Walmart founder Sam Walton, and Mexican billionaire Carlos Slim—pushing its value to more than $9 billion at its height. In 2015, Forbes had named Holmes, a Silicon Valley whiz kid often likened to Steve Jobs, the world’s youngest self-made female billionaire.
But the US Securities and Exchange Commission (SEC), which in June charged Holmes and former president Ramesh “Sunny” Balwani with financial crimes, says the company duped investors by making false and exaggerated claims about its technology and performance. They could face decades in prison.
The two deny the criminal charges, but Holmes had settled civil fraud charges with the SEC in March and agreed to pay a $500,000 penalty without admitting or denying guilt. Balwani fought the allegations.