Theranos, the Silicon Valley blood-testing startup that promised plenty but failed to deliver, is shutting down 15 years after it was founded.
An email to shareholders says the company — which at one time had a valuation of nearly $10 billion and whose board of directors included former secretaries of state and current Secretary of Defense James Mattis — cannot find any buyers and will be dissolved.
“I write with difficult news about the future of the Company,” the letter from CEO David Taylor began. Taylor took over for Elizabeth Holmes, the founder of the company who is now facing criminal fraud charges, in June. He joined Theranos as its general counsel in 2016, a year after reports by the Wall Street Journal called into question claims by Holmes — who founded Theranos as a 19-year-old Stanford University dropout — that the company could use a pin prick’s worth of blood for multiple blood tests.
Taylor said investment bank Jefferies “reached out on our behalf to over 80 potential sale counter-parties” but came away with no buyers.
“We are now out of time,” Taylor said in the letter sent Tuesday, which was obtained by the Wall Street Journal. Theranos does not have enough cash to keep going under terms of a loan from Fortress Investment Group it secured last year, according to the letter. It has about $5 million left that will be distributed to investors.
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In March, the Securities and Exchange Commission announced that it had reached a settlement with Holmes over its accusations that she and former Theranos President Ramesh “Sunny” Balwani engaged in “massive fraud” worth $700 million. Holmes, who did not admit wrongdoing, was fined $500,000 …read more
Source:: The Mercury News – Business