Spare a tear for 85-year-old Rupert Murdoch. According to reports in his Wall Street Journal and reported by the likes of the Financial Times, he has been done over by one of the biggest investment rorts the world has seen for some years. The WSJ reported the Rupetster has lost about US$100 million (A$134 million) of his own money in the failed Theranos blood testing start-up, which the Journal exposed as a fraud.
What was the scam? As Vanity Fair reports:
“By now the story of Theranos is well-known: [Elizabeth] Holmes, a Stanford dropout with a penchant for Steve Jobs-esque black turtlenecks, convinced a group of mostly non-traditional, non-tech investors to pour hundreds of millions of dollars into her company, eventually reaching a $9 billion valuation. Holmes won over the tech media, telling reporters she would revolutionize the blood-testing industry with Theranos’s proprietary Edison device, which she claimed would be able to conduct diagnostic blood tests with a single pinprick. But last year, a series of Wall Street Journal reports questioned the legitimacy and accuracy of the company’s technology, and Theranos’s story began to crumble.”
Murdoch was an early investor and lost it all. But he will probably not be on the bread line — he still got US$34.6 million (up from US$27.9 million in 2014-15) from being co-chair of 21st Century Fox and a further US$5.3 million from dropping in at News Corp (and playing co-executive chair and currently temporary head of Fox News). And he also had a share in the dividends paid by News Corp (20 US cents a share) and Fox (33 US cents a share). The Murdoch and Rupert Murdoch control just 39% of the voting shares in both companies. — Glenn Dyer