Forbes, the business publication that has made a franchise of cataloging the rich, had put Holmes on the top of its list past year of America’s richest self-made women.
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Theranos founder Elizabeth Holmes has a distinguished notation on Forbes’ rich list. She successfully raised millions on its claim that her company’s technology can “quickly process the full range of laboratory tests from a few drops of blood”, a promise that is unraveling by the day.
Holmes’ unusual status, as a young woman who created and controlled a company seemingly valued at about $9 billion, captivated the media: She graced countess magazine covers, including T: The New York Times Style Magazine.
The chief of the medical laboratory services provider has had her net worth cut from $4.5 billion to $0 by Forbes due to the fact that her wealth is entirely made up of her 50% stake at the company.
After speaking with a dozen venture capitalists, analysts and industry experts, Forbes came up with a valuation of $800 million.
“At such a low valuation, Holmes’ [50 percent] stake [in the company] is essentially worth nothing”, Forbes explained. “Forbes is not aware of any plans to liquidate”.
The 32-year-old Holmes started Palo Alto, California-based Theranos in 2003 and remains its CEO.
Theranos fired back in a statement, saying Forbes’ estimate was skewed because it did not have essential data.
Everything from the company’s board to its testing methods have been heavily scrutinized since.
“As a privately held company, we declined to share confidential information with Forbes”, a Theranos spokeswoman said.
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In the event of a liquidation of the company, Theranos’ investors have priority given they only bought preferred shares as opposed to Homes that owns a particular kind of preferred equity called participating preferred shares.
