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An evasive CEO’s dramatic fall

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Prior to October 2015, Elizabeth Holmes basked in the media glow as a glamorous entrepreneur. The founder and CEO of Theranos, a health technology firm, used her charisma and sales skills to woo reporters into writing fawning profiles.

But then her image as a visionary started to crumble. She faced a crisis when a Wall Street Journal reporter wrote a scathing article claiming that the 12-year-old blood-testing company was built on faulty science.

Holmes grew defensive. For two days, she retreated behind closed doors to confer with top executives and attorneys. The firm’s employees were left anxious and unsure what to believe.

Holmes’ crafting of the internal culture didn’t help. She had insisted for years that work units remain walled off from each other. She prohibited employees in one department from talking to colleagues in another about their activities.

In her first media interview, her meandering performance only made matters worse. When the host, CNBC’s Jim Cramer, asked for a true-or-false answer about the allegations, she gave a 198-word evasive reply.

After returning to headquarters, Holmes finally convened her hundreds of employees to address the charges. Rather than rebut the specifics, she attacked the journalist who wrote the article.

More than a year later, 32-year-old Holmes (who remains CEO) presides over a disgraced company. Federal investigators found inaccuracies in its blood tests and regulators barred Holmes from owning or operating a diagnostic lab for two years. Her estimated net worth of $4.5 billion has fallen to near zero.

— Adapted from “The Talented Ms. Holmes,” Nick Bilton, www.vanityfair.com.

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