Elizabeth Holmes and the Rise and Fall of Theranos Inc.
| Case Code: LDEN169 Case Length: 9 Pages Period: 2005-2020 Pub Date: 2021 Teaching Note: Available |
Price: Rs.300 Organization : Theranos Inc. Industry : Healthcare and Services Countries : United States Themes: Entrepreneurship, Business Ethics, Leadership & Values, Ethics in Marketing |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Dark Truths about Theranos
Holmes and Balwani raised US$ 700 million between 2013 and 2015 from investors on the promise of coming out with a revolutionary blood testing technology. That technology did not materialize. They generated funds between 2013 to 2015 through an “elaborate, years-long series of lies and exaggerations about the company’s business, finances, and technology”. Holmes had promised her machine could do 200 tests. In reality, it could perform just a handful. For the vast majority of its tests, Theranos used equipment already available in the market. But Holmes seemed to have lied to the investors about the fact..
The Downfall of Theranos
When the damning WSJ report was published, Holmes went into damage control mode and claimed that all the accusations against Theranos were false, and that her company had supplied over 1,000 pages of documentation that disproved the allegations. “This is what happens when you work to change things. First, they think you’re crazy, then they fight you, and then all of a sudden you change the world,” she quipped..
The Verdict and The Way Ahead
According to the verdict of Edward J. Davila, judge of the US District Court for the Northern District of California, on June 30, 2019, Holmes and Balwani would officially go on trial for the charges against them in San Jose from August 2020. The trial was based on the documents and complaints from the defense presented to the court. Holmes and Balwani would face trial for 20 years in prison and a million dollars in fine starting the next year. Both Balwani and Holmes, had challenged the trial individually..
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