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Theranos Misled Investors and Consumers Who Used Its Blood Test
- ukulele 9y agoPart of me dislikes the title "Blood Unicorn" for being sensationalist, but part of me really likes it for being completely accurate and even a little bit poetic. It kind of feels like all titles should strive for this balance, but I also kind of hate it. I'm sure there's a German word for what I'm feeling!
- wyldfire 9y agoIt seemed to me as if the author semi-sheepishly is admitting being caught up in the fervor surrounding Theranos: > I used to refer to it pretty regularly as the Blood Unicorn, Elasmotherium haimatos, because it was a Silicon Valley unicorn with a peak valuation of $9 billion that managed to raise $700 million from investors. I suppose if "unicorn" is meant to describe fundraising activities, it's accurate. They really raised that money.
- DoreenMichele 9y agoAt one time, it was valued at $10 billion and being called a dekacorn based on valuation.
- deleted 9y ago[deleted]
- jeffreyrogers 9y agoHe's always been skeptical of them as far as I can remember. The whole "Blood Unicorn" thing is a long running joke in his column.
- osteele 9y agoI believe this[1] is the article in which the author, Matt Levine, introduced the phrase “blood unicorn”. That article continues with a quote about Theranos's “bait and switch”; the author concludes the section with “‘There will be an appropriate time and place to talk about the past,’ said Theranos; my guess is that the place might be court.” EDIT: This article[2] (also by Matt Levine) predates [1]. “And here is a unicorn being barbecued in what looks like a medieval manuscript that I will just assume prophesies the coming of Theranos. ‘And lo, a Unicorne shall come among ye, and ye shall call it by the name Theranos, or in the Old Tongues, Elasmotherium Haimatos. And it shall take your Bloode, but only a lyttle bit of your Bloode, and it shall do strange Magick upon said Bloode, and tell ye many Things. But then it shall come to pass that its Magick was [makes 'so-so' hand gesture], and that those Things were mostly not true. And ye shall barbecue that Unicorne.’” [1] https://www.bloomberg.com/view/articles/2016-08-02/mergers-unicorns-and-vampires https://www.bloomberg.com/view/articles/2016-08-02/mergers-u... [2] https://www.bloomberg.com/view/articles/2016-05-26/libor-chats-and-bitcoin-scams https://www.bloomberg.com/view/articles/2016-05-26/libor-cha...
- mathattack 9y agoMatt would appreciate your use of footnotes!
- Areading314 9y agoAmbivalent (and its the same in German)
- ukulele 9y agoI've always thought of ambivalent as meaning no strong feelings either way, but I see that it can also mean mixed feelings (even strong ones). Is there a word that doesn't also include the first part, where it means solely having strong mixed feelings?
- soVeryTired 9y agoGoodbad
- duncanawoods 9y ago"Conflicted" seems to capture it but isn't very poetic. There is more interesting language available if you are oscillating between views e.g. "vacillate" but not really the same as ambivalence.
- HarryHirsch 9y ago"Zwiespältig"
- pavlov 9y agoTorn? "I'm all out of faith / This is how I feel, I'm cold and I am shamed / Lying naked on the floor ..."
- ggambetta 9y agoAnd appropriately for this story, "illusion never changed / into something real" :)
- ScottBurson 9y agoI've always thought of "ambivalent" as indicating fairly strong mixed feelings. I think it's actually the word you want. For the first meaning, I would go with "indifferent".
- rglovejoy 9y ago"Blood Unicorn" is a great name for a metal band, though.
- notananthem 9y agoCame here to laugh and and celebrate a really silly name. BLLOOOOOOODDDD UNIIICORNNNN.
- microtherion 9y ago… or for a gruesome Viking ritual human sacrifice.
- deleted 9y ago[deleted]
- edanm 9y agoFYI, the author regularly discusses unicorns in his daily column, and often gives them funny/appropriate names. E.g. Blood Unicorn for Theranos, Decacorn for Unicorns over 10b in value, and other ones I can't remember now.
- hprotagonist 9y agoI have been a voice in the wilderness since about 2007 on this one, so this is shadenfraude on a level that makes me kind of embarrassed about myself. My background is biomedical engineering, and I just never, ever understood how the sampling rate could ever work. If you're looking for a low-energy signal and your sampling rate is really low, you're just going to miss it and this should've been screamingly obvious to everyone since the beginning. It's like going to the beach, drawing a 5 gallon pail of seawater, looking into it, and then declaring that the beach is shark-free today and it's safe to swim.
- paulcole 9y ago> I have been a voice in the wilderness since about 2007 on this one The Hacker News commenters have always been quite kind and optimistic about Theranos and Ms. Holmes. Were your doubts downvoted?
- hprotagonist 9y agoi only joined HN in 2016, so i missed much of it.
- dang 9y agoThat's far from the case, as anyone who wants to comb through https://hn.algolia.com/?query=Theranos%20points%3E10&sort=byDate&dateRange=all&type=story&storyText=false&prefix=false&page=0 https://hn.algolia.com/?query=Theranos%20points%3E10&sort=by... can see for themselves.
- ryandrake 9y agoI don’t think you had to be a biomedical engineer to have called this one, even years ago. Its attributes hit HN (and the gushing tech media) in all the soft spots: young, female founder, college dropout, wore black turtlenecks like Steve Jobs, disruptive tech, attacking a stodgy conservative industry, order(s) of magnitude claimed improvements. It was simply too good and aligned perfectly with the HN zeitgeist. Just like the poster: “I Want To Believe!” Everyone’s blinders were on, and nobody wanted to recognize the obvious signs of fakery. This has been my favorite tech story of the decade. Watching a rich, well-connected phony get knocked down and called out on all the bullshit fills me with glee. It excites me in ways we don’t talk about in polite company. So many hard working smart people out there toiling away in obscurity while these “elite” fakers get all the recognition and money. The schadenfreude in watching one of them finally and spectacularly burn up is too good to bear.
- subpixel 9y agoI haven't found an article or comment that gives me any insight into what Ms. Holmes might have been thinking. Did she earnestly believe she was on the cusp of some breakthrough, or that one was inevitable with enough brute-force application of investor money? Or was she shrewd and cunning to the core, calculating that she could siphon off enough money to make it worthwhile and spend enough money to spin the facts? I'm totally perplexed trying to put myself in her shoes and understand her motivation.
- headmelted 9y agoI would expect the truth exists somewhere in between. I wouldn't rule out the possibility that: * Holmes started with the best of intentions * Theranos raised capital from starry-eyed investors that didn't carry out proper due diligence * Realization set in early on that it wasn't going to work out * Theranos got scared as so much of their time and other people's money had been invested * The questions mounted * Stalling became outright deception * The realization of the consequences after the WSJ article became starkly obvious * Theranos got spooked and doubled-down on covering up out of fear .. but this is all speculation, and we'll never really know. It does seem though that this didn't turn into fraud (which by the end it's quite clear it was) until late on. It's a bit tragic, really. It seems Holmes could have come clean early on and avoided the worst of the fallout (but for whatever reason that didn't happen).
- ethbro 9y agoIf things working out better are predicated on rising tech stars admitting they're wrong and forgoing the accolades and adulation that accompany the identifier... I can see why things went the way they did. That said, from a personal perspective, I honestly hope Ms. Holmes is either a sociopath or was actually in the dark about how bad things were (e.g. her direct reports were lying to her). It seems like it would be a pretty excruciating mental burden to go into work every day for an extended period of time, knowing your company was inevitably failing, and just trying to keep the plates spinning. Ugh.
- 9y ago
- IAmEveryone 9y agoMatt Levine proves, again and again, that there’s more nuance to any situation than one might think. He’s the living embodiment of the law’s “reasonable observer”.
- fwdpropaganda 9y agoI like Matt Levine very much, but exactly what nuance is he adding in this specific case?
- olivermarks 9y agoI'm sure there are all sorts of dark actors in the shadows on this one. Holmes is being hung drawn and quartered in public, but there were many other people involved in building up this chimera. The board of directors are an interesting bunch and Ramesh "Sunny" Balwani is a colorful character. Holmes may have been a patsy, who knows... Bloomberg and most other media companies pumped Theranos up for all it was worth, then Murdoch's WSJ deflated the balloon, having previously blown it up to dekacorn dimensions. It feels like the pump and dump plays so popular in the dot com era by the money.
- ng12 9y agoWas she the CEO or not? If the CEO does not bear responsibility for egregious, dangerous fraud who does?
- sephlietz 9y agoI think the point is that others likely should also be held responsible. Not sure I understand your argument here.
- ng12 9y agoI'm specifically disagreeing with the usage of the term "patsy", which implies that she's not morally complicit on grounds of naivete.
- olivermarks 9y agoFair but she might be a clueless rube who got played...
- kolpa 9y agoPlayed by who? Who made money on Theranos? Anyone who knew it was a fraud wasn't going to profit from investing. They wouldn't be able to cash out before the product failed at market. Maybe a supplier would profit from selling supplies, but not the investor/advisors.
- smsm42 9y agoReading this article, I've had a nagging feeling - ok, the founder may have presented a wrong picture, but isn't it the task of tech journalists to call them on that? I am sure some would always be fooled, but how comes pretty much all of them, according to the article, were fooled? And not by some ingenious heist that takes a genius to unravel, but by buying a device from another company, showing it to journalists and telling them "we invented this new awesome thing" and nobody is the wiser? Where's the added value in journalists then, are they reduced now to repackaging press-releases and writing "oh, we've got fooled again" postmortems? OK, let's say they don't have the expertise. A lot of people do. Did they ask those people and report what they are thinking? How comes then I am reading both "any person with med test background should have seen it" and "nobody was seeing it"? If a thing like this happened with some software system, there would be a place for deep redesign of monitoring and evaluation systems, that should have prevented such failure. Yet it happens again and again with reporting and as far as I can see no work is done to fix it.
- FireBeyond 9y agoHow much ability to do this is possible short of subpoena though? Theranos history is littered with staged demos (not being described as such), deception (running tests with other manufacturer machines), and outright lies. For all the upbeat press release regurgitation (of which there was a lot, absolutely), there's limits to investigative journalism of those who _were_ skeptical.
- smsm42 9y agoWell, interviewing a bunch of specialists saying "this contradicts all I know about medical diagnostics for this and this reason" - like we see happening here - and then asking the Theranos reps "could you please explain what these experts are missing here, in detail" would be a good start. Of course, Theranos could bullshit their way out of it, but distinguishing bullshit answers from substantial answers is usually much easier and more accessible to non-specialists than figuring out if the whole thing is bullshit from zero.
- mhermher 9y ago
- model_m_warrior 9y agoSeemed that way from the beginning. What kind of people become journalists?
- zaidf 9y agoAs she long is able to dodge criminal charges, I think she got away with a slap on the wrist. A $500,000 fine and returning most of her Theranos equity is hardly proportionate punishment for a supposed-$700M fraud.
- jstarfish 9y agoBy comparison, Shkreli is going to prison over a mere $10M fraud.
- JackFr 9y agoShkreli fought it - she took the deal.
- milankovic 9y agoOh, wow.. Honest question: I know that plea deals and other rather arcane behind-the-scenes agreements are a thing, but as someone who is not all too familiar with the American justice system, is that really the only relevant difference? So, what kept Shkreli from taking a deal?
- deleted 9y ago[deleted]
- aleeds 9y agoHe thought he could get away with it.
- milankovic 9y agoApparently. And it seems that Theranos actually gets away with it.
- cwkoss 9y agoFrom my limited understanding, he broke the law but was able to return all the funds to investors. So there weren't damages per se, but I think statutory penalties instead.
- rs999gti 9y ago$700M is a pretty big scheme, what's the likelihood Elizabeth Holmes gets jail time?
- ericmcer 9y ago"Theranos made direct use of its positive press to raise money: It "sent investors a binder of background materials," which included "articles and profiles about Theranos, including the 2013 and 2014 articles from The Wall Street Journal, Wired, and Fortune" I can't decide if the investors were foolish for trusting in news articles, or if the news articles should have been trustworthy.
- JackFr 9y agoMatt Levine is a national treasure.
- deleted 9y ago[deleted]
- econner 9y agoIs there any data on how much the executives of Theranos profited while trying to produce these blood tests?
- detaro 9y agoThe SEC report says about Holmes > Holmes was paid a salary of approximately $200,000 to $390,000 per year between 2013 and 2015 > Holmes has never sold any of her Theranos stock. > Due to the company’s liquidation preference, if Theranos is acquired or is otherwise liquidated, Holmes would not profit from her ownership until – assuming redemption of certain warrants – over $750 million is returned to defrauded investors and other preferred shareholders. So she probably didn't profit that much financially from the fraud (especially not compared to the sums in play), unless Theranos somehow magically comes back from the grave.