Elizabeth Holmes is best known for her company Theranos which promised to revolutionize blood testing. Once dubbed the world’s youngest self-made female billionaire, she now faces prison time. Here are 17 things to know about Elizabeth Holmes and her company Theranos.
1. Elizabeth Holmes was born on February 3, 1984, in Washington, D.C. Her mom, Noel, was a Congressional committee staffer, and her dad, Christian Holmes, worked for Enron before moving to government agencies like USAID.
2. At nine years old, Elizabeth Holmes wrote a letter to her father declaring that what she “really want[ed] out of life is to discover something new, something that mankind didn’t know was possible to do”. She also told relatives she wanted to be a billionaire when she grew up.
3. Holmes went to Stanford to study chemical engineering. When she was a freshman, she became a “president’s scholar,” an honor that came with a $3,000 stipend to go toward a research project.
4. She dropped out of Stanford at the age of 19, founded Theranos in 2003, and sought to develop an innovative blood testing device.
5. Theranos has what is on the face of it a straightforward purpose – to make blood tests simple, timely, unalarming, and cheap.
6. Her firm said their “Edison” device could test for a variety of diseases through only a few drops of blood from a person’s finger.
7. It would democratize the testing process, allowing anyone to get a test done at a pharmacy and have it analyzed in hours.
8. Theranos planned to charge less than half the rates charged by Medicare and Medicaid in the US – potentially saving the US government $200bn over the next decade.
9. US Treasury Secretary George Schultz, media tycoon Rupert Murdoch, Larry Ellison, and America’s richest family, the Waltons, were among her backers.
10. By 2014 the company had raised more than $400m and was valued at about $9bn. Ms. Holmes was worth $4.5bn, according to Forbes magazine, making her the youngest self-made female billionaire.
11. Shortly after Holmes dropped out of Stanford at age 19, she began dating Theranos president and COO Sunny Balwani, who was 20 years her senior, although they’re now separated.
12. Ms. Holmes was an interviewer’s dream: she cultivated a Steve Jobs image, wearing only black turtleneck sweaters in public. She quoted Jane Austen by heart. She went vegan and talked enthusiastically of her favorite wheatgrass-celery-cucumber “green juice”. She spoke on panels with Bill Clinton and gave impassioned TED talks.
13. In 2015, reports in the Wall Street Journal suggested the devices were flawed and inaccurate. Accusing the firm of not using its machines to test blood samples, prompted an investigation by the US financial regulator, the Securities and Exchange Commission.
14. Within a year, Theranos had its licenses revoked and began shutting down its labs. By 2016 Forbes had revised its estimates of Ms. Holmes’ fortune to “nothing”.
15. Charges were brought against Theranos and its former president Ramesh “Sunny” Balwani as well as Ms. Holmes.
16. In March 2018, Theranos, Holmes, and Balwani were charged with “massive fraud” by the SEC. Holmes agreed to give up financial and voting control of the company, pay a $500,000 fine, and return 18.9 million shares of Theranos stock. She also isn’t allowed to be the director or officer of a publicly-traded company for 10 years.
17. Holmes now faces the possibility of decades in prison after being found guilty on one count of conspiracy to defraud investors and three counts of wire fraud. Each count carries a maximum 20-year prison sentence, a $250,000 fine, and a requirement to pay victims restitution.