Biotech and Pharma

Secretary DeVos, Walmart heirs and other investors reportedly lost over $600 million on Theranos

Key Points
  • Several high-profile investors in Theranos lost more than $600 million, the Wall Street Journal reported Friday.
  • The founders of Walmart and Education Secretary Betsy DeVos were among those to lose more than $100 million.
  • The start-up's valuation tanked after an investigation by the Journal revealed Theranos was unable to develop the commercially-ready portable blood analyzer it promised investors.
Theranos CEO Elizabeth Holmes settles with SEC, agrees to pay fine
Theranos CEO Elizabeth Holmes settles with SEC, agrees to pay fine

Theranos, the blood-testing company on its way to liquidation, caused several high-profile investors to lose more than $600 million, according to a Wall Street Journal report Friday.

Documents unsealed in a lawsuit brought against Theranos reveal a number of the high profile investors who had a stake in the nearly worthless start-up: The Waltons, founders of Walmart, with $150 million; Rupert Murdoch, with $125 million; and the DeVos family, including Education Secretary Betsy DeVos, with $100 million. The investments were made between 2013 and 2015, according to the Journal.

While Theranos is fighting the lawsuit brought by banker Robert Colman, the company's founder Elizabeth Holmes is laying off the remaining Theranos workforce. She wrote in an April 10 email to shareholders that the company may be liquidated by August, according to the WSJ.

Elizabeth Holmes, CEO of Theranos.
Brendan McDermid | Reuters

Holmes settled fraud allegations made by the Securities and Exchange Commission in March, agreeing to pay a $500,000 fine, give back a large portion of her Theranos shares and be barred from acting as a public company's officer or director for a decade.

The start-up made it appear as if Theranos has successfully developed a commercially-ready portable blood analyzer. In reality, the technology could only perform a small number of tests advertised.

The company had about 800 employees as recently as 2015. An investigation by The Wall Street Journal exposed Theranos' efforts to mislead investors and the public about its technology. The most recent layoff brought the head count of the failing company down to two dozen or less.

Read the full Wall Street Journal report here.