Theranos to formally dissolve

Ebony Scott
September 8, 2018

Theranos Inc., the Silicon Valley blood-testing company accused of defrauding investors, will formally dissolve, The Wall Street Journal reported Wednesday.

It also added Theranos founder Elizabeth Holmes has settled a shareholder lawsuit in July that was created to recover whatever can be salvaged from the firm.

The announcement comes almost three months after Theranos founder and former chief exective Elizabeth Holmes and former chief operating officer Ramesh Balwani were charged with criminal fraud.

It took the better part of a decade for the fraud perpetrated by Theranos to be uncovered, in large part because Holmes was able to cultivate relationships with some of the world's most powerful, influential and wealthy people. It raised about $900 million and achieved nearly $10 billion valuation, anointing Holmes as "the next Steve Jobs".

She and Mr Balwani still face up to 20 years in prison and fines of millions of dollars if convicted of fraud.

But Theranos came under scrutiny after the Journal published articles questioning its claims.

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The downfall of Holmes, who settled with the Securities and Exchange Commission in March over fraud charges it announced against her, has hastened the collapse of her company.

Theranos is closing up shop, The Wall Street Journal reported on Tuesday night, citing a shareholder email.

Theranos shared very little about its blood-testing machine, nicknamed Edison, with the public or medical community. At one time, Theranos was worth more than $10 billion and Holmes the youngest self-made female billionaire. At its peak, the privately held company was valued at $9 billion. The Journal reports that most of the company's employees - reported to be down to fewer than two dozen as of April, a drastic fall from a peak of 800 - worked their last day on August 31.

Taylor took over the CEO role from founder Elizabeth Holmes, a Clinton donor and presidential ambassador for global entrepreneurship under former President Barack Obama, after she was charged with "massive fraud". That choice is preferable to any other option, including bankruptcy, as that would leave it unable to distribute any material assets to creditors, Taylor wrote. The story raised concerns about the accuracy of Theranos' blood-testing technology, which put patients at risk of having conditions either misdiagnosed or ignored. Theranos didn't respond for a request to comment outside regular business hours.

It's rare that we see a LinkedIn employee count graph that's sloping to a zero point, but in Theranos, we see a company that hasn't just been losing investors, but also employees who say they work for them.

Other reports by GizPress

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