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Rupert Murdoch Cashes in US$125M of Theranos Stock for US$1
- justboxing 10y ago> US$125 million of Theranos stock for US$1 I thought it was a click-bait title, but after reading the story, I am a little confused. Why would he take a $125 ( minus 1 $) loss? Tax credits? Or was / is the stock worthless and the $125 mil is what he originally paid for, or accrued in value?
- tedunangst 10y agoYou can't realize the loss until you actually sell it. If you're about to realize 100 million in profits, it's better to offset that with a loss now than dragging it out over the next decade.
- openmosix 10y agoMurdoch invested in Theranos ~100M a few years ago https://www.theguardian.com/media/2016/nov/29/rupert-murdoch-theranos-investment-wall-street-journal https://www.theguardian.com/media/2016/nov/29/rupert-murdoch... You can only consider the investment "failed" if the company goes belly up. Till then, you have to wait to write the investment off (and request a tax credit on the loss). Selling it is a way to proof your investment is now worth ~zero - so you can write it off in the next fiscal year.
- yread 10y agoI don't understand why do you get a tax credit for a loss in stock investment. You don't get a tax credit for any other loss!
- brilliantcode 10y agoTheranos did not have a product/market fit not because they didn't try but they didn't actually have a working product at all it seems from the article. It's interesting to see they've been kept afloat by big name investors all these years. edit: why is this comment being downvoted? Theranos failed and now looks like investors are angry. Do you disagree?
- beaconstudios 10y ago"not having product/market fit" is an interesting way of describing a company that is being actively investigated for fraud by the SEC.
- brilliantcode 10y agonot having product/market fit because you don't have a product but acted like you did needs to be audited. Note that this is different from not having product/market because of lack of demand. which sums up SV startups. It's one thing to rip people off, it's a whole another to build an entire company around a non existent product. The latter takes some Talented Mr. Ripley level of Machiavellianism ( or/and being born to a rich white connected sugar daddy).
- Stanleyc23 10y agoI think ppl are downvoting you because referring to Theranos' situation using a product/market fit model presupposes you have a product for the market to accept or reject. The product that they promised to the market certainly had high demand/fit, that's why got so much investment. Theranos simply didn't have anything close to what they were promising, hence the fraud.
- stuaxo 10y agoAbout the only way the rest of society will see any of the wealth he is sitting on.
- tedunangst 10y agoI have no idea what this means since he's selling for a loss to minimize the amount of money he returns to society in the form of taxes.