Blood-testing startup Theranos said to be closing

Blood-testing startup Theranos said to be closing

Blood-testing startup Theranos said to be closing

The Wall Street Journal got its hands on an email the company's CEO David Taylor sent to shareholders.

It also added Theranos founder Elizabeth Holmes has settled a shareholder lawsuit in July that was created to recover whatever can be salvaged from the firm.

Wednesday's announcement comes almost three months after Theranos founder and former CEO Elizabeth Holmes and former Chief Operating Officer Ramesh Balwani were charged with criminal fraud.

Mr Taylor, who also serves as general counsel to the firm, said that Theranos had engaged the services of investment bank Jeffries to try to "maximise the value of the company" for shareholders. Holmes founded the company in 2003 when she was only 19 and since had frequently been referred to as the "next Steve Jobs".

Federal prosecutors have charged Holmes and her deputy, Ramesh Balwani, with fraud against investors, doctors and patients.

But Theranos came under scrutiny after the Journal published articles questioning its claims.

In March, Holmes reached a settlement with the Securities and Exchange Commission related to its fraud charges, which further damaged Theranos and helped lead to its demise.

According to a report from CNN Money, the Silicon Valley startup's founder and former CEO, Elizabeth Holmes, faces charges of fraud in connection with her practices with the company.

Theranos shared very little about its blood-testing machine, nicknamed Edison, with the public or medical community.

Theranos was once valued at $9 billion.

She carefully crafted her image as well, wearing nearly entirely black turtleneck sweaters that earned her the moniker in Silicon Valley as "the next Steve Jobs". After years of scandal and failed attempts to sell the company, its cash dipped too low, according to a $65 million loan agreement with Fortress Investment Group, which is entitled to foreclose on the company's assets.

Holmes had claimed that the company's technology could run comprehensive lab tests using just a few drops of blood - a pitch that appealed to Walgreens, which partnered with Theranos to offer the blood tests in its stores. "Despite our careful cash management, we are in default under the Fortress credit facility", Taylor wrote.

Holmes and the company settled the SEC's allegations.

As for its business outlook rating - how employees believe the company will fare in the next six months - Theranos has been on a slow dive for over a year.

Related news

[an error occurred while processing the directive]