Billionaire bitcoin bull Tim Draper is raising eyebrows for repeatedly defending Elizabeth Holmes, the disgraced former CEO of Theranos, a healthcare company that was accused of “massive fraud” after allegedly scamming $900 million from investors.
“We have taken down another great icon,” Draper told CNBC May 10 in a rambling interview. “She got bullied into submission.”
Draper insists Holmes was maliciously targeted in a sexist “witch hunt” by the Wall Street Journal when the newspaper exposed her fraudulent plot to raise $900 million from investors.
Theranos falsely claimed that it had developed a “commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood.”
Tim Draper: WSJ Reporter Was Like a Hyena
Draper blamed Wall Street Journal reporter John Carreyrou for investigating Theranos’ flamboyant, unsubstantiated claims and exposing them as lies.
“This writer was like a badger going after her, like a hyena going after her, and then it became a bigger and bigger thing,” Draper said. “I think it was a great mission, and she did a great job.”
In March 2018, the Securities and Exchange Commission charged Elizabeth Holmes and her business partner Ramesh “Sunny” Balwani with “massive fraud.”
The SEC said Holmes and Balwani perpetrated an elaborate, years-long scheme to raise hundreds of millions of dollars by making “exaggerated or false statements” about Theranos’ technology and financial performance.
“Theranos, Holmes, and Balwani made numerous false and misleading statements in investor presentations, product demonstrations, and media articles by which they deceived investors into believing that its key product – a portable blood analyzer – could conduct comprehensive blood tests from finger drops of blood, revolutionizing the blood testing industry,” the SEC revealed in a statement.
“In truth, Theranos’ proprietary analyzer could complete only a small number of tests, and the company conducted the vast majority of patient tests on modified and industry-standard commercial analyzers manufactured by others.”
Theranos’ investor list read like a who’s-who of billionaires, including the Walton family, News Corp. chairman Rupert Murdoch, and New York Times owner Carlos Slim.
Senator John McCain even visited Holmes at Theranos’ lab in 2015 (he’s now dying of brain cancer).
During the Theranos heyday, Elizabeth Holmes was lionized as a role model for women who broke the glass ceiling in the male-dominated STEM (Science, Technology, Engineering, and Mathematics) field.
Holmes’ face was splashed across magazine covers around the world for becoming the youngest self-made female billionaire whose net worth topped $4.5 billion. Except, of course, it was all a lie. Holmes’ revolutionary invention was a fraud and she turned out to be a scam artist.
Venture capitalist Tim Draper was an early investor in Theranos who reportedly put up $500,000. He has repeatedly defended Elizabeth Holmes, insisting she created an incredible company. Theranos is now on the verge of bankruptcy and was forced to lay off almost all its employees.