Elizabeth Holmes, a self-made American billionaire and founder of the blood-testing company Theranos, has witnessed a sharp downgrade in her net worth: from about $4.5 billion just a year ago to "zero" now, according to Forbes.
Holmes had topped of Forbes list of America's richest self-made women in 2015. How did the steep fall from $4.5 billion to zero happen?
It's all due to the valuation of Theranos taking a beating from $9 billion in 2014 to about $800 million recently. Holmes has a 50 percent stake in the start-up that defines itself on its website as "detecting the onset of disease in time for therapy to be effective."
The $9-billion valuation was made when private investors bought into the unlisted company in 2014, but since then the company's has gone downhill for two reasons, according to the magazine.
Allegations of "inaccurate" blood tests that are under investigation by government agencies, along with its modest annual revenues of less than $100 million, have prompted investors to peg the company's valuation at a "realistic" $800 million.
Forbes quoted VC Experts, a venture capital research firm that has valued Theranos at $800 million for the $724 million it raised from investors and its intellectual property. The drastic markdown in valuation from $9 billion to $800 million makes 32-year-old Holmes' stake in Theranos "essentially worth nothing," according to the magazine.
Theranos declined to comment on the news item. "As a privately held company, we declined to share confidential information with Forbes," the New York Times quoted Brooke Buchanan, a company spokeswoman, as saying in a statement.
Elizabeth Holmes was part of a discussion on the future of equality and opportunity last year at the Clinton Global Initiative, sharing the stage with Jack Ma, executive chairman of the Alibaba Group, and former U.S. president Bill Clinton.