Elizabeth Holmes and Theranos trial: What to know
Theranos was once valued at $9B before collapsing to nothing
Jury selection begins for Theranos CEO Elizabeth Holmes. FOX Business' Lydia Hu with the latest.
The trial of Theranos founder Elizabeth Holmes, who was once one of the most promising young entrepreneurs in Silicon Valley, is underway.
Holmes, who was once estimated to be a billionaire, had a spectacular rise to prominence in the technology community based on her vision of building a simplified blood-testing system.
FOX Business takes a look at the gripping rise and fall of Holmes, who is facing federal charges that she allegedly bilked investors out of millions.
EMBATTLED THERANOS FOUNDER ELIZABETH HOLMES MOVES TO HAVE INDICTMENT DISMISSED
Founder and CEO of Theranos Elizabeth Holmes attends Forbes Under 30 Summit at Pennsylvania Convention Center on Oct. 5, 2015 in Philadelphia, Pennsylvania. (Photo by Gilbert Carrasquillo/Getty Images)
STANFORD STAR TO SILICON VALLEY CEO
Holmes started Theranos at the age of 19. She dropped out of Stanford University to follow her vision of developing a technology that would allow comprehensive blood testing and analysis with a small amount of blood obtained from a prick of a finger.
ELIZABETH HOLMES' MOTION TO DISMISS PATIENT-RELATED CHARGES TO BE HEARD MONDAY
THERANOS FOUNDER TO BILLIONAIRE
The startup took off. At its height, the company was valued at more than $9 billion after raising nearly $900 million from investors, according to The Wall Street Journal. Holmes, who was profiled by Inc. in a 30 under 30 feature, had an estimated net worth of $4.5 billion, according to Forbes. She was one of the world’s youngest self-made female billionaires at the time.
THERANOS HOUSE OF CARDS?
Then it descended. Wall Street Journal Pulitzer Prize-winning journalist John Carreyou began raising questions about the company. Carreyou interviewed more than 150 people, including dozens of former Theranos employees. After the onset of inspections, lawsuits and deals that fell through, the company had less than $200 million at the end of 2016 – less than 25% of the amount of cash it had initially raised from investors. Theranos did not generate any revenue in 2015 or 2016.
The collapse also exposed major national pharmacy chains, including Walgreens and CVS, which had been on board to carry the blood testing product.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WBA | WALGREENS BOOTS ALLIANCE INC. | 8.48 | -0.33 | -3.75% |
| CVS | CVS HEALTH CORP. | 53.19 | -1.90 | -3.45% |
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Sunny Balwani, former president and chief operating officer of Theranos Inc., arrives at federal court in San Jose, California, U.S., on Wednesday, Oct. 2, 2019. The defunct blood-testing startup which was once valued at as much as $9 billion unravel … (Michael Short/Bloomberg via Getty Images)
FROM SEC TO FEDERAL CHARGES OF ‘MASSIVE FRAUD’
The charges. Theranos, Holmes and former president Ramesh "Sunny" Balwani agreed to a settlement with the SEC, which alleges that they committed a "massive fraud" in lying about one of the company’s key products. In addition, Holmes was stripped of control of the company and is barred from serving as an officer or director at any public company for the next decade. She was forced to return to investors 18.9 million shares, which the SEC said were obtained through fraud, and paid a $500,000 penalty. Holmes and Balwani were charged with raising more than $700 million from investors through a fraudulent scheme that took place over the course of years. Holmes and Balwani were indicted by a grand jury in June 2018.
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John Carreyrou's "Bad Blood: Secrets and Lies in a Silicon Valley Startup" is set to be turned into a movie starring Jennifer Lawrence.
HOLLYWOOD COMES CALLING
Hollywood jumps on board. In May 2018, following the SEC news, publisher Alfred A. Knopf fast-tracked the release of "Bad Blood: Secrets and Lies in a Silicon Valley Startup," based on a book written by Carreyrou. The book, which chronicles the downfall of the health care company, is set to be turned into a movie starring Jennifer Lawrence, as first reported in Deadline. The movie will be produced by Legendary, the studio behind such films as "Interstellar," "The Dark Knight Rises," "300" and "The Hangover."
FOX Business' Brittany De Lea contributed to this report.
This story, originally published May 3, 2021, has been updated.