It was late morning on Friday, October 18, when Elizabeth Holmes realized that she had no other choice. She finally had to address her employees at Theranos, the blood-testing start-up that she had founded as a 19-year-old Stanford dropout, which was now valued at some $9 billion. Two days earlier, a damning report published in The Wall Street Journal had alleged that the company was, in effect, a sham—that its vaunted core technology was actually faulty and that Theranos administered almost all of its blood tests using competitors’ equipment.
A year ago, Theranos founder, CEO and Chairman Elizabeth Holmes was one of the darlings of Silicon Valley before praise for her blood-testing company turned to criticism and doubt about its efficacy after a reporter read an article with a cryptic description of its technology, reported Vanity Fair.
Theranos has come under fire after a series of articles from The Wall Street Journal documented the problems at Theranos, which claimed its blood-testing technology could supply an enormous amount of data with only a tiny sample. Amid growing doubt about its technology, Walgreens (WBA) ended its relationship with the company and the U.S. banned Holmes from running labs for two years.
The Wall Street Journal’s John Carreyrou’s investigation of the company’s practices began after the reporter read an article in The New Yorker. In the article, Holmes, who like her idol, the late Steve Jobs, is known for her secrecy, supplied a rather cryptic response for how the technology worked.
She told The New Yorker that “a chemistry is performed so that a chemical reaction occurs and generates a signal from the chemical interaction with the sample, which is translated into a result, which is then reviewed by certified laboratory personnel.”
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