Elizabeth Holmes was atop the Forbes list of America’s Richest Self-Made Women with a net worth of $4.5 billion, however, today, the magazine lowered its estimate of her net worth to nothing.
Theranos, a blood-testing company founded by Holmes and of which she owns 50%, has been found to be a fraud after its results were confirmed fake.
Holmes had been promising to publish data for six months, but hadn’t submitted a single paper as of April. She initially presented the Food and Drug Administration’s approval of a single test for herpes virus as proof that her technology worked, and that a startling 120 more approvals would follow.
Instead, the FDA introduced restrictions that led Theranos to stop using its finger-stick tests, and no approvals have followed. Theranos has voided thousands of the finger stick tests, according to a May report from The Wall Street Journal.
Forbes revealed that it had spoken to a venture capitalists, analysts and industry experts and concluded that a more realistic value for Theranos is $800 million, rather than $9 billion. That gives the company credit for its intellectual property and the $724 million that it has raised.
“Our estimate of Holmes’ wealth is based entirely on her 50% stake in Theranos, the blood-testing company she founded in 2003 with plans of revolutionizing the diagnostic test market. Theranos shares are not traded on any stock market; private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company.
“Since then, Theranos has been hit with allegations that its tests are inaccurate and is being investigated by an alphabet soup of federal agencies. That, plus new information indicating Theranos’ annual revenues are less than $100 million, has led FORBES to come up with a new, lower estimate of Theranos’ value.” Forbes said.
However, in light of the coming legal lawsuits by former users of the company’s products whose use the company has admitted may have implicitly put people’s lives in danger, it remains to be seen how much further her finances will suffer.