Theranos founder to give up shares to investors who will not sue
Theranos Inc. plans to give additional shares to investors who pledge not to sue the battered blood-testing company or Elizabeth Holmes, its founder and chief executive, people familiar with the matter said.
The deal includes investors who participated in Theranos’s latest funding rounds, which ended in 2015 and brought in more than $600 million. Those investors could get about two additional shares for each share they bought, one of the people said.
The additional shares would come from Holmes’s personal stake in Theranos, some of the people said. That would result in her relinquishing her majority ownership of the closely held Palo Alto, Calif., company, some of the people said.
People familiar with the deal said it was approved by Theranos’s board in February. Investors are still reviewing terms of the proposed agreement, but most have signaled that they will sign off on it, these people said.