it. Over a lunch served by the ranch’s staff, Holmes pitched Murdoch
on an investment, emphasizing that she was looking for long-term
investors. Don’t expect any quarterly reports for a while, she warned
him, and certainly not an initial public offering. The investment packet
that was later delivered to Murdoch’s Manhattan office reiterated that
message. Its cover letter stated in the first paragraph that Theranos
planned to remain private for the “long term” and went on to repeat
those two words no fewer than fifteen times.
Murdoch was known to dabble in Silicon Valley startup investments.
He’d been an early investor in Uber, turning a $150,000 bet into some
$50 million. But unlike the big venture capital firms, he did no due
diligence to speak of. The eighty-four-year-old mogul tended to just
follow his gut, an approach that had served him well on his way to
building one of the world’s biggest media and entertainment empires.
The one call he placed before investing in Theranos was to Toby
Cosgrove, the CEO of the Cleveland Clinic. Holmes had mentioned
that she was on the verge of announcing an alliance with the world-
renowned heart center. Like Yuri Milner, Cosgrove had only good
things to say when Murdoch reached him.
Theranos was by far the single biggest investment Murdoch had ever
made outside of the media assets he controlled, which included the
20th Century Fox movie studio, the Fox broadcast network, and Fox
News. He was won over by Holmes’s charisma and vision but also by
the financial projections she gave him. The investment packet she sent
forecast $330 million in profits on revenues of $1 billion in 2015 and
$505 million in profits on revenues of $2 billion in 2016. Those
numbers made what was now a $10 billion valuation seem cheap.
Murdoch also derived comfort from some of the other reputable
investors he heard Theranos had lined up. They included Cox
Enterprises, the Atlanta-based, family-owned conglomerate whose
chairman, Jim Kennedy, he was friendly with, and the Waltons of
Walmart fame. Other big-name investors he didn’t know about ranged
from Bob Kraft, owner of the New England Patriots, to Mexican
billionaire Carlos Slim and John Elkann, the Italian industrialist who
controlled Fiat Chrysler Automobiles.