Embattled blood-testing firm Theranos to dissolve

Ben Davidson
September 6, 2018

Under founder and now-former CEO Elizabeth Holmes, Theranos raised more than $700 million from investors and was valued at $9 billion at its peak.

Theranos, the once-celebrated Silicon Valley blood testing firm, is about to dissolve itself months after top executives were indicted for defrauding investors, the Wall Street Journal reported on Wednesday.

The company told shareholders in an email that it will dissolve and pay out the remaining cash to creditors, according to the Journal.

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In the email obtained by the Wall Street Journal, he said the investment bank had "reached out" to over 80 potential buyers, but to no avail. Mr. Balwani was Theranos's president and chief operating officer until he retired from the company in May 2016.

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Ms. Holmes sought to disrupt the blood-testing business. If convicted, they each face a maximum sentence of 20 years in prison and a fine of $250,000, plus restitution to those found to have been defrauded, on each count. At one point, the business was valued at nearly $10 billion, largely on the strength of its promise to provide blood testing through just a drop or two of blood.

Ms Holmes herself became a business pin-up, wearing a black turtleneck jumper that drew comparisons with Steve Jobs, while profiles regularly pointed out that, like other successful tech entrepreneurs such as Bill Gates and Mark Zuckerberg, she was a college drop-out.

Taylor's email appears to herald the final stages of Theranos, which was once one of Silicon Valley's most lauded startups, drawing investments from Oracle (ORCL) founder Larry Ellison and media mogul Rupert Murdoch. The pharmacy chain has said it was misled by Theranos about its technology and prospects.

His first expose on the company's technology ran in October 2015, and Theranos voided two years of its blood tests just seven months later. Behind the scenes, it performed the vast majority of the tests with commercial analyzers purchased from other companies. Its failure was dramatic and painful for many.

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