Skip to main content
Premium Trial:

Request an Annual Quote

And, Poof, It's Gone

Forbes has downgraded the estimated net worth of Theranos founder Elizabeth Holmes from a $4.5 billion last year to zero this year.

Forbes' Matthew Herper writes that the magazine's estimate of her wealth was based on her 50 percent share of Theranos, the now-embattled blood-testing firm. Last year, Herper wrote that while there was skepticism surrounding Theranos' technology, he was confident that it was a real company offering a new way of performing blood tests.

This confidence appears to have eroded as Theranos has been hit with allegations that the company doesn't use its proprietary platform Edison for many of its tests, a federal inspection that revealed significant problems at its California lab, and as the company issued tens of thousands of corrected blood test reports. The company is also under criminal investigation and is being sued by customers. Regulators have further threatened to bar Holmes from owning or operating a lab.

Forbes now estimates Theranos itself to be worth $800 million, rather than last year's $9 billion valuation. This new figure, Herper says, includes the $724 million the company has raised as well as considerations for its intellectual property. It also reflects, he says, information suggesting that Theranos' annual revenues are less than $100 million.

This then means that Holmes' 50 percent stake, which is in common stock, is worth virtually nothing as other Theranos investors have participating preferred shares, meaning they'd get paid before Holmes would if there's a liquidation, Herper adds.

"As a privately held company, we declined to share confidential financial information with Forbes," Theranos spokeswoman Brooke Buchanan tells the Huffington Post in an email. "As a result, the article was based exclusively on speculation and press reports."

Herper notes that Holmes could raise money to increase the company's valuation and is scheduled to present data at the August AACC meeting in support of the company's platform.

"In the meantime, given the difficulties at Theranos, Holmes falls off the list of America's Richest Self-Made Women and off all of Forbes' other wealth lists," he says.