Forbes magazine now estimates Theranos founder Elizabeth Holmes’ net worth to be zero dollars after the company was bedeviled for months by claims that her revolutionary new finger-prick blood tests were inaccurate.
Just last year, Ms. Holmes “topped the FORBES list of America’s Richest Self-Made Women with a net worth of $4.5 billion,” the magazine noted Wednesday, going on to explain the criteria behind the estimated 100 percent drop in her net worth.
“FORBES spoke to a dozen venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion,” the magazine noted. “That gives the company credit for its intellectual property and the $724 million that it has raised, according to VC Experts, a venture capital research firm. It also represents a generous multiple of the company’s sales, which FORBES learned about from a person familiar with Theranos’ finances.”
“At such a low valuation, Holmes’ [50 percent] stake [in the company] is essentially worth nothing,” Forbes explained. “Theranos investors own preferred shares, which means they get paid back before Holmes, who owns common stock.”
“It is possible that at some point, Holmes may be able to raise money at a higher valuation than $800 million from her existing investors, but we are not betting on it,” the magazine concluded.
In addition to scrutiny from federal regulators and a strained partnership with the Walgreen’s pharmacy chain, Theranos is also now the target of two class-action lawsuits, as UPI reported Tuesday.
“The latest lawsuit was filed on Thursday from a man named Casey Jones in Phoenix, alleging false advertising and failing to follow proper lab procedures. The first, from another customer in Northern California, also accusing the company of false advertising.”
• Ken Shepherd can be reached at kshepherd@washingtontimes.com.
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