The blood-testing company, which at one time was valued at over $9 billion, officially closed in September 2018, after failing to find a buyer. The Wall Street Journal has reported that any equity investments in the company are now completely worthless. If you missed this detailed timeline of the Theranos scandal, here's what happened:
John Carreyrou's exposé in The Wall Street Journal first brought negative attention to the once lauded startup. He wrote a series of pieces on the company where he interviewed several current and former employees who claimed Theranos's management was incompetent, had exaggerated the capability of the technology, and was essentially lying to the public and investors about their product.
Despite her attempts to do damage control with various media appearances, Holmes was unable to remove the seed that had been planted in the minds of many regarding the legitimacy of her technology.
In the following months, in what felt like a gradual folding of a shoddy house of cards, a potential deal with supermarket chain Safeway, worth hundreds of millions of dollars, collapsed. Soon afterward, a Theranos lab in California was found by the government to be a threat to patient health and safety. Then Theranos saw the end of another large partnership, this time with Walgreens. The company quietly settled its lawsuits, including one with its largest investor, who accused it of securities fraud.
Finally, in the spring of 2018, Holmes and Theranos's former president, Ramesh “Sunny” Balwani, were charged with massive fraud by the SEC, which accused them of “raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.”
Soon after these charges were made, Holmes was stripped of her control of the company, had to return millions of shares to Theranos, and was officially barred from serving as an officer or director of a public company for ten years. She eventually stepped down as CEO a few months later, after being indicted on eleven counts of fraud and conspiracy. These days, you get an error message when you try to visit www.theranos.com.
It makes sense that the downfall of this company would inspire books, documentaries, and features, because much of it really sounds like fiction more than fact. And yet Holmes's very real trajectory is a powerful reminder of how entrepreneurial optimism can quickly transform into delusion.
Today, all that remains of the company is the shameful memory of a founder who duped the world into believing her falsified claims — a memory that will, hopefully, serve to prevent others from meeting the same fate.