Elizabeth Holmes, the CEO of blood testing startup Theranos, has had a rough year. News broke in April that the company, which she founded, was under criminal investigation and an SEC probe for potentially misleading investors. And now, in an almost comical reminder that wealth is often an illusion in Silicon Valley, Forbes has reduced its estimation of Holmes's net worth from $4.5 billion earlier this year to $0.00. Yep. Zero dollars.
Just how does the magazine figure Homles is now $4.5 billion dollars poorer than she was last year? Well, to start, it claims her company is worth way less than the last funding round would suggest — pegging the actual value at $800 million (which, hey, not bad!).
"That gives the company credit for its intellectual property and the $724 million it has raised according to VC Experts, a research firm, even though some of that has already been spent on building labs and on research," explains Forbes. "It also represents a generous multiple on the company's sales. Theranos' investors have preferred shares, which means that at FORBES' current estimated valuation they'll get their money back before Holmes, who owns common shares, gets a cent."
In other words, Holmes's 50 percent ownership of the company isn't worth a dime as of now. Ouch.
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