Silicon Valley is best known for being the home of dreams, startups, and unicorns. It also sometimes happens to be home to scams and scandals. There is perhaps no bigger example of both than Theranos, the blood-testing company that turned out to be a money-sucking fraud instead. Or so says the charges hurled against it. While its executives continue to deny the accusations, the company itself is finally calling it quits and will soon formally dissolve. And whatever it has left will be used to pay unsecured creditors.
There are probably only a few names that will go down in history for having duped so many into giving up so much money for what seemed like an impossible dream. It was Silicon Valley, after all, both famous and notorious for small upstarts that disrupt the status quo and make millions in so short a time.
In Theranos’ case, it was the healthcare industry that was getting its socks rocked off. It promised a mini lab that, with a tiny sample of blood, could diagnose a wide range of diseases. It was poised to democratize the healthcare industry and help smaller companies fight the David and Goliath battle against giant corporations.
But if you asked the SEC and federal authorities, Theranos lied. But its lie was so good that it managed to dupe investors into giving out $700 million to the company. It made the lie sound so real that these people believed the US DoD was really using its kits. And it convinced doctors and patients to believe in that lie as well.
That lie will finally stop really, really soon. The Wall Street Journal reports that Theranos, Inc. will finally dissolve soon, paying unsecured creditors what it has left in its coffers. According to the report, however, investors lost around $1 billion in total. And while the company may disappear, its problems and the criminal charges against its founder Elizabeth Holmes and other executives won’t be going away any time soon.