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Last night HBO aired a new documentary about the Theranos scandal. Couple this with one of the most popular podcasts of all time and a best-selling book (one of the best I read last year, I highly recommend it), it’s clear that Americans can’t get enough of the story.
From the book jacket, here’s a cliff-notes version of the tale:
In 2014, Theranos founder and CEO Elizabeth Holmes was widely seen as the female Steve Jobs: a brilliant Stanford dropout whose startup “unicorn” promised to revolutionize the medical industry with a machine that would make blood testing significantly faster and easier. Backed by investors such as Larry Ellison and Tim Draper, Theranos sold shares in a fundraising round that valued the company at more than $9 billion, putting Holmes’s worth at an estimated $4.7 billion. There was just one problem: The technology didn’t work.
One aspect of the saga I’ve never thought received enough attention is the involvement of Newscorp’s Rupert Murdoch. He was one of the company’s biggest investors, and he put more cash into Theranos than he had put into almost any other single investment ($125 million).
While the rest of the media were writing fawning profiles of Theranos and its CEO, the Wall Street Journal’s John Carreyrou smelled a rat and went digging. When Holmes got wind that Carreyrou may be working on a story that could blow her entire operation into oblivion, she called her investor to try to do some damage control. With several other investors (most notably George Schultz, who sided with Holmes over his own grandson) willing to run interference, it wasn’t an unreasonable expectation that Murdoch would use his position of power at his own company to put a stop to the story. But that’s not what Murdoch did.
When Holmes called Murdoch with her concerns over Carreyrou’s reporting, he basically told her (paraphrasing because I don’t have the book in hand) that if there wasn’t a story, he trusted that his editors wouldn’t run with it. They were able to run the Journal without his interference on all other matters, and this wouldn’t be any different.
By letting Carreyrou’s reporting go on, Murdoch lit his entire investment on fire.
You may wonder why we haven’t heard more about this part of the story. Well, probably not, you know why Rupert Murdoch isn’t getting that many accolades. It plays counter to progressive’s entire perspective about Newscorp and its properties. As the wife of a former employee of a different entity (the New York Post) it was nice to read, and it’s contrary to a lot of the opinions out there about how Murdoch runs his companies. There were so many times over the course of my husband’s time at the Post where I’d ask about stories and if he heard if Murdoch had expressed some sort of opinion on it to my husband or his superiors, but he never heard anything of the sort.
The only time my husband Seth ever told me he heard from Murdoch was when some internal extensions were changed around, and he got a few calls from the Boss Man by mistake. (He’d pick up the phone and hear “Please hold for Rupert” and before he could stop the assistant, he’d be on the phone with Murdoch himself.)