The golden child of the biotech world has lost her luster—and her entire fortune. "Last year, Elizabeth Holmes topped the Forbes list of America's Richest Self-Made Women," Forbes pointed out Wednesday, noting it had rejiggered the $4.5 billion attributed to her last year: "Today, Forbes is lowering our estimate of her net worth to nothing." This comes after allegations (by Wall Street Journal reports) that Holmes' company, Theranos, misled investors, relied on poor Q&A, and didn't adequately respond to complaints—all subjects of a criminal probe by what Forbes calls "an alphabet soup of federal agencies." The new calculation takes into account Holmes' 50% stake in Theranos, as well as a new look at the $9 billion valuation for the blood-testing company implied in 2014. Forbes talked to industry experts and venture capitalists to get what it feels is a more accurate valuation: a significantly lower $800 million.
"At such a low valuation, Holmes' stake is essentially worth nothing," the magazine notes. It explains that due to the company's structure, Holmes owns common stock, while the company's investors have what's known as "participating preferred shares"—which means if the company is liquidated, the investors all get paid before she does. Adding to Forbes' dismal reassessment: Theranos has yet to prove its testing works, Holmes hasn't provided promised data, and there may not even be a market for Theranos' services. The Los Angeles Times takes Forbes to task for having her on its wealth list in the first place, saying the initial figure was based on shoddy reasoning, it took her claims as "gospel," and that all the reasons Forbes is now giving were there to begin with. "All that's changed is that the Theranos bubble has popped, and the joke's on Forbes," the paper notes. No comment from Holmes. (Fox Business has a snarky primer on "How to Blow $9 Billion in Six Months.")
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