Citing her company's problems, Forbes says it has sharply revised its estimate of the net worth of Theranos founder Elizabeth Holmes. One year after Holmes topped the magazine's list of the wealthiest self-made women with a worth of $4.5 billion, Forbes now values her fortune at "nothing."
The decision, Forbes says, was made partly because of how Theranos' stock is structured. While Holmes owns 50 percent of the company — which the magazine says is now worth around $800 million — her stock is in common shares, meaning that the investors who got preferred shares in return for more than $720 million in funding are first in line to be repaid.
While mention of that detail might raise the specter of a possible breakup of the once-heralded biotech company, Forbes adds that it isn't aware of any such plans. Today, Theranos said the magazine's revised estimate isn't based on hard numbers.
"As a privately held company, we declined to share confidential information with Forbes," says Theranos spokeswoman Brooke Buchanan. "As a result, the article was based exclusively on speculation and press reports."
Holmes, 32, founded Theranos in 2003 and is its CEO. While Theranos isn't publicly traded, Forbes notes, "private investors purchased stakes in 2014 at a price that implied a $9 billion valuation for the company."
Here's how NPR's Laura Sydell recently summarized the challenges that Holmes and her company face:
"A young Stanford dropout who left school to pursue her entrepreneurial vision, she founded Theranos and said she would disrupt the world of medicine with easy and inexpensive blood tests.
"Now her company is under federal investigation and extra scrutiny by federal regulators. And questions are being raised about whether applying hardware and software business culture to biotechnology is dangerous."
And as Laura noted in her story last month, even as the Securities and Exchange Commission and the U.S. Attorney's Office in Northern California investigate, supporters of Theranos and its founder say both of them will be vindicated.