A court has ordered Theranos, a millennial-run blood testing company, to pay $4.8 million to settle a fraud case. Elizabeth Holmes was Silicon Valley’s favorite young CEO. Now, her company is dogged by lawsuits, and her personal fortune has evaporated.
Theranos promised to upend the health industry by making blood tests easier and cheaper. Tests that used to require vials of blood would now only necessitate a finger prick. The “Edison” device was going to change medical testing forever. There was only one problem: the “Edison” wasn’t accurate, and Theranos cooked the books to hide the fact that their blockbuster device didn’t really work.
A young adult built Theranos, and a young adult took it down from inside. Elizabeth Holmes dropped out of Stanford at age 19 to start the company; she is now 34. She wore a black turtleneck every day and seemed to live at her office, much like her idol Steve Jobs.
The whistleblower, Tyler Shultz, was a Theranos employee tasked with checking the accuracy of Edison’s test results. At age 26, he uncovered one of the greatest corporate scandals in a generation. Shultz told the world that when Edison devices failed, Theranos threw out the bad results. This made it look like Edison devices were extremely accurate, when the devices were really not very accurate at all.
Tyler Shultz’s grandfather, George Shultz, served as Secretary of State under President Ronald Reagan. The elder Shultz was a board member for Theranos, along with Henry Kissinger – Secretary of State under Presidents Nixon and Ford.
Elizabeth Holmes never shied away from the political arena. President Obama named her an “Ambassador for Global Entrepreneurship” in 2015, and President Clinton brought her onstage at a Clinton Global Initiative Event the same year.
Holmes nearly hosted a fundraiser for Hillary Clinton in March of 2016; however, Theranos was under such intense scrutiny at that point that the Clinton camp relocated the event. Holmes still appeared as a featured attendee at the $2,700-a-pop soiree. Chelsea Clinton was in attendance, too.
The woman-in-tech wunderkind has fallen far since the night of the fundraiser. At the company’s peak, it was valued at $9 billion. Holmes’ personal fortune amounted to half of that: a cool $4.5 billion. Now, Forbes estimates that “Holmes’ stake is essentially worth nothing.”
Court documents reveal that Theranos lied about more than its technology. The company lied about its financials, too. It “used a shell company to “secretly” buy commercial-lab equipment, and improperly created rosy financial projections for investors,” according to the Wall Street Journal.
A politically-minded millennial built Theranos, and a Millennial from a political family exposed its lies.
