5 ms·

I wonder how far Liz Holmes is going to take this thing. I wonder when it hits the breaking point where even she accepts the cold hard truth that this company t

by bedhead 11y ago

I wonder how far Liz Holmes is going to take this thing. I wonder when it hits the breaking point where even she accepts the cold hard truth that this company that was famously valued at $9b is pure vaporware, built on little more than smoke and mirrors. Does the company need to file bankruptcy? Do investors need to sue to recover what money is left? Do insiders need to be criminally charged? I wonder...

flormmm 11y ago
Serious question: Even if Theranos goes down in flames, won't she walk away from this with a fortune? Maybe not quite the fortune she thought, but still many millions?
- tyre 11y ago
  Quite likely. In later rounds, founders are often strongly encouraged to take money off the table by selling equity. This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company. Ramen-profitable is good in the short term, but time becomes increasingly valuable as a company grows.
  - kolbe 11y ago
    This is true for many companies, but in the case of gross negligence[1], simply the action of her cashing out could be securities fraud and/or grounds for clawing back the money she took out. [1] which I'm not accusing Holmes of, but it's not out of the question, either.
  - kzhahou 11y ago
    It's common and its bullshit. If founders take from funding then so should employees. They should be able to stop worrying about money as much as the founders.
  - bsder 11y ago
    > This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company. Uh, no. It's so that the founders won't sell the company at a mere 4-5x rather than then 20-100x that the VC's want. If it was genuinely about the company, they'd let all the initial people take some stock off the table. Instead they only allow the people who could sell the company to take stock off the table. Big difference.
- rdlecler1 11y ago
  I'd assume that at this point she sold off at least a few million dollars in shares.
- w1ntermute 11y ago
  She came from an old money family, so she will inherit millions regardless of whether she made (or will make) anything off of Theranos.
  - randycupertino 11y ago
    I've seen her driving around town, she has some insane sports car that looks like a rocket ship. I couldn't even recognize what it was (Ferrari? Lamborghini?) it was so unusual looking.
    - petra 11y ago
      Really ? in the media(i think the new yorker, pretty respectable) she was portrayed with the life style of a monk.
- return0 11y ago
  It's quite possible that some clients will find grounds to sue if something serious is proven.
trhway 11y ago
they will pivot. If i remember correctly from the magazine articles her original idea 10+ years ago was cell-phone attached to some diagnostic gadget. May be time to revisit, now with all the money and manpower.
- joezydeco 11y ago
  Except the "diagnostic gadget" is the part that is not working here. Attaching a cellphone won't make things any better.
  - finance-geek 11y ago
    Probably not, but seems like a good way to turn a bad business into a worse one, but one you can claim is "Mobile" and attract more VC cash!
Uhhrrr 11y ago
The letter doesn't seem to be saying the tests don't work, or that they're vaporware. It is only finding "noncompliance". Looking at the first item, "Hematology" (https://www.law.cornell.edu/cfr/text/42/493.1215 https://www.law.cornell.edu/cfr/text/42/493.1215), it could just be that one of the conditions here (https://www.law.cornell.edu/cfr/text/42/493.1269 https://www.law.cornell.edu/cfr/text/42/493.1269) wasn't met. Those look pretty easy to fix! Of course, yes, there could also be all sorts of crazy sketchy voodoo. Ya never know.
- such_a_casual 11y ago
  There is more than this recent fiasco to back up the person you're replying to: http://arstechnica.com/science/2015/11/new-study-spills-doubt-on-some-fingerprick-blood-tests/ http://arstechnica.com/science/2015/11/new-study-spills-doub...
  - Uhhrrr 11y ago
    Interesting, I hadn't seen that! But even if it only works for finding herpes and other there-or-not infections, they still might justify their valuation.

by bedhead 11y ago

flormmm 11y ago

Serious question: Even if Theranos goes down in flames, won't she walk away from this with a fortune? Maybe not quite the fortune she thought, but still many millions?

tyre 11y ago
Quite likely. In later rounds, founders are often strongly encouraged to take money off the table by selling equity. This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company. Ramen-profitable is good in the short term, but time becomes increasingly valuable as a company grows.
- kolbe 11y ago
  This is true for many companies, but in the case of gross negligence[1], simply the action of her cashing out could be securities fraud and/or grounds for clawing back the money she took out. [1] which I'm not accusing Holmes of, but it's not out of the question, either.
- kzhahou 11y ago
  It's common and its bullshit. If founders take from funding then so should employees. They should be able to stop worrying about money as much as the founders.
- bsder 11y ago
  > This isn't shady, it's so the founding team stops worrying about money and focuses full-time on the company. Uh, no. It's so that the founders won't sell the company at a mere 4-5x rather than then 20-100x that the VC's want. If it was genuinely about the company, they'd let all the initial people take some stock off the table. Instead they only allow the people who could sell the company to take stock off the table. Big difference.
rdlecler1 11y ago
I'd assume that at this point she sold off at least a few million dollars in shares.
w1ntermute 11y ago
She came from an old money family, so she will inherit millions regardless of whether she made (or will make) anything off of Theranos.
- randycupertino 11y ago
  I've seen her driving around town, she has some insane sports car that looks like a rocket ship. I couldn't even recognize what it was (Ferrari? Lamborghini?) it was so unusual looking.
  - petra 11y ago
    Really ? in the media(i think the new yorker, pretty respectable) she was portrayed with the life style of a monk.
return0 11y ago
It's quite possible that some clients will find grounds to sue if something serious is proven.

trhway 11y ago

they will pivot. If i remember correctly from the magazine articles her original idea 10+ years ago was cell-phone attached to some diagnostic gadget. May be time to revisit, now with all the money and manpower.

joezydeco 11y ago
Except the "diagnostic gadget" is the part that is not working here. Attaching a cellphone won't make things any better.
- finance-geek 11y ago
  Probably not, but seems like a good way to turn a bad business into a worse one, but one you can claim is "Mobile" and attract more VC cash!

Uhhrrr 11y ago

The letter doesn't seem to be saying the tests don't work, or that they're vaporware. It is only finding "noncompliance". Looking at the first item, "Hematology" (https://www.law.cornell.edu/cfr/text/42/493.1215 https://www.law.cornell.edu/cfr/text/42/493.1215), it could just be that one of the conditions here (https://www.law.cornell.edu/cfr/text/42/493.1269 https://www.law.cornell.edu/cfr/text/42/493.1269) wasn't met. Those look pretty easy to fix! Of course, yes, there could also be all sorts of crazy sketchy voodoo. Ya never know.

such_a_casual 11y ago
There is more than this recent fiasco to back up the person you're replying to: http://arstechnica.com/science/2015/11/new-study-spills-doubt-on-some-fingerprick-blood-tests/ http://arstechnica.com/science/2015/11/new-study-spills-doub...
- Uhhrrr 11y ago
  Interesting, I hadn't seen that! But even if it only works for finding herpes and other there-or-not infections, they still might justify their valuation.