Blood Unicorn

Theranos Forgets to Use BCC, Accidentally Outs Confidential Investors in Group E-mail

Patriots owner Robert Kraft and the Walmart-owning Walton family were just some of the billionaires linked to an e-mail sent to “Theranos investors” last week.
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By Lisa Lake/Getty Images.

Theranos, the once high-flying blood-testing start-up, can’t seem to catch a break. The company and its founder, Elizabeth Holmes, are facing down a series of nasty lawsuits and a federal criminal investigation over claims that Theranos misled investors about its proprietary finger-prick diagnostic tool. And yet, the news somehow continues to get worse for Holmes, who was once heralded as the world’s youngest self-made female billionaire. (Theranos has said it is cooperating with the investigation.)

Thanks to Theranos’s latest blunder, we now know that it’s not just Rupert Murdoch and Walgreens that handed over their money to Holmes. In his latest story for The Wall Street Journal, intrepid Theranos reporter John Carreyrou reveals a long list of previously credulous investors, whose names surfaced when the recipients of a group e-mail were exposed. While previous e-mails sent to the company’s investors apparently hid the names of recipients, an e-mail sent last week, addressed to “Theranos investors,” didn’t make use of the BCC function, reportedly outing dozens of investors who, given the current state of affairs, would presumably wish to maintain a low profile. Among the investors in the group e-mail are an executive of Mexican billionaire Carlos Slim’s Grupo Financiero Inbursa SAB; representatives to the Walton family, which owns Walmart; and representatives of New England Patriots owner and Donald Trump pal Robert Kraft. (Vanity Fair has reached out to a representative for Theranos for comment and will update this story when they respond.)

More disturbing than the biotech company’s apparent inability to properly use e-mail is, as Carreyrou reports, Theranos’s wild revenue projections. While soliciting money in recent years, the Palo Alto–based company had predicted revenue of almost $2 billion and net income of $505 million in 2016. Theranos had expected its revenue to be nearly $1 billion in 2015, with a net income of about $330 million, meaning that Theranos expected to double its earnings over the course of a year, despite little evidence that its tests worked at the time it was soliciting funding. These figures no doubt helped Holmes attract a slew of primarily non-traditional, non-tech investors, raising more than $686 million at a $9 billion valuation. But like the accuracy of its diagnostic tool, the success of Theranos’s revenue projections was apparently also not a guarantee. The Wall Street Journal reports that Theranos directors had recently taken a look at the projections given to investors and the company’s board and concluded they “couldn’t find any basis for the projections.”

Correction: An earlier version of this story mistakenly identified Mexican businessman Carlos Slim as an investor in Theranos. The investor was an executive at Slim’s Grupo Financiero Inbursa SAB, not Slim himself. This story has also been edited for clarity.