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Walgreens hits Theranos with breach-of-contract lawsuit



Theranos is a blood-testing startup that was founded by Elizabeth Holmes in 2003. It marketed itself as a revolutionary blood-testing company that had technology that would make all the diagnosis processes cheaper, more convenient and more efficient. They developed a state-of-the-art device that acts as a portable laboratory. The issue was that doctors would be able to draw samples of the area in question but not have the equipment or space to test their hypotheses. This would then end up in a week long wait for a test result or possibly a different sample request. What Theranos did was cut this process out by bringing the lab to the doctors so they can perform their own tests. The company quickly gained traction and had record growth. It had become a $9 billion dollar company for a short time. However, the company was accused of fake test results and endangering the public, so now Theranos is worth only $800 million and Elizabeth Holmes’ net worth shrinking from $4.5 billion to $0.

This is a perfect example of the rich get richer phenomenon, where a website that attracts attention early is able to get newcomers to join in and link to the site. In this case however, Theranos is getting bad publicity from the government and other corporations so there as just been an onslaught of lawsuits from new companies. Walgreens is following the people in front to sue a vulnerable company and is causing a cascading effect. So Theranos is actually getting richer in terms of attracting plaintiffs rather than profits or clicks.


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November 2016