You are using an older browser version. Please use a supported version for the best MSN experience.

Previous Next

Forbes just cut its estimate of Theranos CEO Elizabeth Holmes' net worth from $4.5 billion to zero

Quartz 04-06-2016 Oliver Staley

Replay Video

UP NEXT

Ford Recalls More Than 800,000 Trucks

The issue stems from an engine block heater cable that may corrode and cause a fire.

Newsy
The US Economy Actually Grew At A Slightly Lower Rate Last Quarter

The U.S.'s third-quarter GDP growth rate wasn't quite as high as the government previously estimated. On Friday, the Commerce Department revised that figure to 3.4 percent, down just a bit from the original 3.5 percent. According to the Department, the change is due to revisions in exports and consumer spending, but it's still considered a solid growth rate. In the second quarter, U.S. economic growth hit an almost-four-year record of 4.1 percent. Earlier this week, the Federal Reserve predicted steady growth for next year's economic forecast.

Newsy
Fed Hikes Interest Rates For The 4th Time This Year

The Federal Reserve just announced what economists have been expecting: It's raising interest rates for the fourth time this year. Central bankers unanimously voted to hike the rate to 2.5 percent, which is a quarter of a percent increase. The rate controls borrowing when it comes to things like mortgage costs and credit cards. Even amid recent stock market volatility and signs of a possible economic growth slowdown, the Fed appeared optimistic in its outlook for 2019. Federal Reserve Chairman Jerome Powell said next year's forecast is still showing solid growth. And the central bank is now predicting just two rate hikes for 2019 instead of three. President Donald Trump hasn't been shy about criticizing the Fed's recent policy decisions . But Powell said political contention isn't deterring Fed officials from doing their job. "Political considerations have played no role whatsoever in our discussions or decisions about monetary policy," he said. "We have the independence which we think is essential in order to be able to do our jobs in a nonpolitical way. We at the Fed are absolutely committed to that mission, and nothing will deter us from doing what we think is the right thing to do." U.S. stocks reacted negatively to the news Wednesday. Investors appear concerned about the fine line between hiking rates steadily to keep the economy balanced and raising rates too quickly, which which experts say could lead to a recession . Additional reporting from Newsy affiliate CNN .

Newsy

Cancel

Theranos Corrects 2 Years' Worth Of Flawed Blood Test Results

Newsy

See more videos

What to watch next

UP NEXT

Not long ago, Elizabeth Holmes was regarded as one of the US’s most successful female entrepreneurs, with a net worth of $4.5 billion, Forbes estimated.

On Thursday, Forbes cut that figure to zero.

Holmes’s wealth is entirely wrapped up in her 50% stake in Theranos, the medical testing start-up she founded in 2003. The privately-held company in Palo Alto became a standout for its bold attempts to revolutionize the diagnostic industry—it claimed it could test for 240 diseases from a few drops of blood—and for A-listers like Henry Kissinger and Bill Frist on its advisory board.

Last year, Forbes pegged its value at $9 billion, based on the sale of stakes to investors. Since that lofty estimate, Theranos has been battered by bad news, starting with reports in the Wall Street Journal in October that its tests were inaccurate. That triggered an inquiry from the federal Centers for Medicare and Medicaid Services, which proposed banning Holmes from the industry.

Forbes went back to its slide rule and, after talking to venture capitalists and industry experts, recalculated Theranos’ value at $900 million, based on its intellectual property and money it has already raised. “At such a low valuation, Holmes’s stake is essentially worth nothing,” Matt Herper writes.

That’s because Theranos’s other investors own preferred shares, and since Holmes owns common shares, they would get paid first if the company were forced to liquidate.

Theranos didn’t provide a comment to Forbes and has yet to respond to an email from Quartz sent before the start of business hours in California.