Tainted Theranos founder Elizabeth Holmes started an 11-year sentence in a federal prison in Texas this week. The news triggered memories of her once being celebrated as a visionary, including by CNBC’s “Mad Money” host Jim Cramer.
Total Recall: Redditors on Wednesday recalled a 2015 interview of Holmes with Cramer. In the interview, the stock picker is seen effusively praising her and comparing her with Apple co-founder Steve Jobs.
"To me, it is reasonable to compare you.. with Steve Jobs and what he did for computing. I record you as a visionary, next-generation person, Cramer said in the interview.
Holmes was seen replying with modesty, saying Jobs has no comparison.
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Why It Matters: Holmes launched Theranos in 2003 at the age of 19, presenting it as a leading health technology company with rapid and minimal blood tests.
Backed by venture capitalists and boasting prominent board members, the company secured a partnership with Walgreens in 2013 and raised over $400 million in funding by 2014. The FDA approved Theranos’ herpes simplex 1 virus diagnostic test in July 2015.
The Downfall: However, a Wall Street Journal investigative report in October 2015 challenged Theranos’ testing claims, leading to scrutiny from federal regulators in January 2016.
The company swiftly unraveled, resulting in its dissolution in September 2018 after its net worth plummeted to zero.
In 2018, Holmes and her former partner Ramesh Balwani, Theranos’ ex-chief operating officer, were charged with multiple counts of wire fraud for their alleged involvement in a multi-million dollar scheme to defraud investors, doctors, and patients.
Following the denial of her request to remain free pending an appeal, Holmes received her prison sentence after a federal judge’s order in April. She and Balwani were instructed to pay $452 million in restitution to the affected parties.
Photo by Fortune Global Forum on Flickr
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