Elizabeth Holmes: Her roller coaster life

The SEC is investigating the company again.

The temporary halt of Theranos’ business has an eerie echo of the initial short seller findings that put a halt on Theranos funding in 2016.

Theranos falls back to Earth, one day before a major government conference focuses on the company.

In 2004, Elizabeth Holmes revolutionized the blood testing industry as she founded Theranos. With a knack for the unexpected, Holmes would also change the way Americans pay for healthcare by initiating the first ever consumer blood testing clinic.

As the years went by, Holmes grew to become one of the most famous entrepreneurs in Silicon Valley. Even though Holmes grew frustrated with the way the company was being run, she kept raising money and kept the company afloat. Eventually, short sellers called to question the Theranos funding model, calling into question Holmes’ ability to be honest and earnest with investors in the face of Wall Street scrutiny.

On Monday, Theranos began temporarily halting business after the SEC put out a statement asking for documents and records from certain executive officers and directors. This temporary halt came the same day that Holmes was scheduled to speak at a major healthcare conference at Carnegie Mellon University. The 10th annual Convergence conference will take place this week in Pittsburgh.

Holmes has become increasingly polarizing within the medical industry after a now viral YouTube video surfaced that showed her taking a blood sample from a bar in Massachusetts. At the time of that video, Holmes did not have a doctor’s license to provide blood tests to consumers. Yet, she would go on to lead Theranos to success, which would then lead to her getting tens of millions of dollars of funding from Wall Street. Despite Theranos’ successes, analysts have repeatedly questioned whether Theranos is any good.

Now Holmes has returned to the back seat. In 2014, The Wall Street Journal published allegations that Theranos was using fake blood tests and one misplaced error. Soon after, the SEC placed Theranos on a stop-stock order. Holmes ultimately resigned as CEO in June 2015.

Holmes and Theranos continue to fight the allegations in the media and the court of public opinion.

In May 2017, Theranos reported a “formal, but non-detailed, settlement” with the SEC, just over a year after the SEC sued Holmes in November 2015. The agreement called for a $500,000 fine and 800 hours of community service. Holmes put out a statement announcing the agreement, along with that she would continue to try to get the company back on track.

In the past several months, Theranos has continued to fight the SEC’s allegations. The company has rebranded, unveiled more sophisticated software at the International Paralympic Committee, and has rolled out its new iLab in Pittsburgh.

In September 2017, the company announced that Dr. Stuart Adamson would become CEO. Adamson was previously head of medical services at Altria Client Services in Pittsburgh and is a past board member of St. Jude Children’s Research Hospital. “Now that we are demonstrating that we can reliably conduct Theranos technology-driven blood tests without relying on a blood draw at the doctor’s office, Theranos is clearly bigger than we thought we were from the beginning,” said Adamson in the announcement.

Despite all of the progress Theranos has made in the years since the initial short seller report, The Wall Street Journal has continued to call the company a fraud and the SEC has returned.

In 2018, as Holmes and company seem to be resetting their business for 2019, investors and members of the medical community have begun questioning whether Theranos is worth the money it raised in 2016.

Now that Theranos has announced the SEC’s investigation and that it has temporarily halted business, investors and users should pay closer attention to what the future will bring for Holmes and Theranos.

Leave a Comment