7 ms·

> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird. The thing is, the

> What just amazed me is how gullible all the investors were, and how they didn't do due diligence, hire outside experts, or anything. Weird. The thing is, the primary goal of an investor is not to invest in companies that are honest and actually do what they claim. The goal is to invest in a company that reaches a valuation high enough to let them recoup their investment at a profit. If that valuation happens through fraud, hype, destroying the environment, whatever, that doesn't really factor in. It probably is the case that successfully doing what the company claims has a positive correlation with higher valuation, but it's not strictly necessary. The failure mode for the investors in Theranos is not that it was fraudulent. It's that the fraud was discovered before they could cash out. They didn't need to believe that Theranos was honest, they just needed to believe that other later investors would believe they were honest.

avalys 5y ago
Can you provide any examples of a high-profile company, ultimately shown to be dishonest, where the early investors were able to “cash out” before this dishonesty became known?
- hef19898 5y ago
  Depends on what you call early. Nikola and WeWork come to mind, I assume Newman wasn't the only one to cash out early enough during one of the founding rounds.
- ta1234567890 5y ago
  Uber Explanation, since this is being downvoted. Uber might not have lied about their business, but it surely looks like investors never cared about the businesses viability and rather only cared about being able to turn a profit on their investment (which was the point being made by the gp). To this day, it is still not clear if Uber’s business model is viable. Also not to mention the original CEO/founder’s reputation and attitude, which the investors also didn’t care about until it became too big of a scandal. Additionally, the investors didn’t even care that Uber was technically illegal (same as Airbnb btw). Some references: https://techcrunch.com/2021/02/12/will-ride-hailing-profits-ever-come/ https://techcrunch.com/2021/02/12/will-ride-hailing-profits-... https://www.marketwatch.com/story/uber-and-lyft-are-staging-a-ridiculous-race-for-fake-profits-11628205337 https://www.marketwatch.com/story/uber-and-lyft-are-staging-... https://www.businessinsider.com/uber-company-scandals-and-controversies-2017-11#january-2012-uber-gets-slammed-in-its-first-major-surge-pricing-backlash-2 https://www.businessinsider.com/uber-company-scandals-and-co...
  - eli 5y ago
    A dishonest company in other ways too. They sent drivers and riders misleading information about any local attempts to regulate them in the slightest. When they first launched UberX in DC, I called them out for a price comparison of Taxi vs UberX that couldn't possibly be true. They quietly changed the blog post and marketing materials shortly after.
  - Alex3917 5y ago
    > which the investors also didn’t care about until it became too big of a scandal More like investors didn't care until they needed liquidity.
  - supperburg 5y ago
    The idea that Uber is not profitable is a myth isn’t it? I remember they posted some financial documents a while back that showed them in the red. But when I looked at the papers there were literal billions in advertising and expansion. Uber runs the app. People call an Uber and they pay money. Some of that money goes to the driver and some goes to Uber. You’re really saying that Uber can’t collect enough money to run their computers and pay some staff? It just doesn’t make sense. Of course they can.
    - ta1234567890 5y ago
      > The idea that Uber is not profitable is a myth isn’t it? No, it’s a financial/accounting fact expressed by Uber themselves in their filings as a public company. Having a business model (which is what you are describing), doesn’t make it profitable. Hertz had a business model too, they owned cars, people rented cars and paid money for that. Are you saying Hertz couldn’t collect enough money to run their operations and pay some staff? Well they couldn’t, and they went bankrupt. They were also in the red for several years before the pandemic hit.
    - dogman144 5y ago
      Collecting enough money to pay staff/run servers != profitable. You're asking a cash flow vs. a income statement question. With enough cash flow, yes, can achieve any sort of operational expense that you're referring to. Uber still hasn't turned a profit, and might be able to soon via some creative accounting: https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-fake-profit-1847716786 https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-f...
- edot 5y ago
  WeWork and Nikola come to mind. Robinhood depending on if you consider purporting yourself to be “stealing from the rich, giving to the poor - Robinhood”, but you actually take orders from Citadel to be fraud. I think a lot of recent IPOs will turn out to be fraud-lite, in which it is shown over the next decade that these companies were pump and dumps that never actually do anything. They look just good enough to garner investment at IPO for initial investors to cash out. Most any company with ML or AI in their branding, running stupid amounts of CNBC ads and repeating their AI name 30 times during the ad.
  - mrkramer 5y ago
    WeWork and Theranos were selling hype no real solution or service. They seem like companies from dot com bubble era, I thought tech investors got smarter but they are still as stupid as they were 30 years ago.
    - jollybean 5y ago
      WeWork is different than Theroanos. People actually rented WeWork properties and got a valuable service. The problem was more or less shenanigans on the Exec. side, and unsustainable financial situation. In that case, the 'consumers' actually end up ahead, with a cheaper services than otherwise, then investors lost.
      - HWR_14 5y ago
        >WeWork is different than Theroanos. From my understanding, WeWork was more of a working business that was overvalued and had a lot of self-dealing with the CEO (which I would characterize as embezzling, but may not legally have been.) Theranos invested their money in trying to make an impossible product, lying and failing at it the whole time. But I could be wrong, sensationalist news headlines and such.
        jollybean 5y ago
        I believe this is correct.
- exogeny 5y ago
  MagicLeap, Groupon, Nikola, WeWork, Uber.. A company doesn't have to have an exit for early investors to get out. You just need to find a sucker to buy into a round later than you. How to do that, in the modern context, is pretty clear. Either do it through outright fraud (Theranos, Nikola, MagicLeap), extreme FOMO (MagicLeap), or raising so much that you crush competition despite comically bad fundamentals and never get to unit-profitability (Uber, others).
- kingTug 5y ago
  Robinhood
- jborichevskiy 5y ago
  Enron, for one https://en.wikipedia.org/wiki/Enron#Peak_and_decline_of_stock_price https://en.wikipedia.org/wiki/Enron#Peak_and_decline_of_stoc...
  - sircastor 5y ago
    This is the first one that came to mind for me.
- guiriduro 5y ago
  Most, if not all SPACs.
- danans 5y ago
  Still unfolding, but Lordstown Motors looks like exactly that. https://hindenburgresearch.com/lordstown/ https://hindenburgresearch.com/lordstown/
- nosianu 5y ago
  Do cigarette companies lying about health effects of smoking and Big Oil doing the same about climate change count? Just example links, I think I'm not making any outrageous claims but that this has long been established and discussed here too many times: https://stopswithme.com/exposing-big-tobacco/big-tobacco-found-guilty/ https://stopswithme.com/exposing-big-tobacco/big-tobacco-fou... https://www.theguardian.com/environment/2021/jun/30/climate-crimes-oil-and-gas-environment https://www.theguardian.com/environment/2021/jun/30/climate-... The investors already got theirs many times over. I think you could also include any company that left what became a "super fund site" (US name, similar in other countries). They cannot have believed creating and leaving all that toxic waste in the ground would be a neutral action.
- michael1999 5y ago
  Groupon.
  - elkos 5y ago
    I remember the company/service but I'm unfamiliar with the unfolding of the company.
    - michael1999 5y ago
      They launched their IPO while marginal revenue was still solidly negative; published a bunch of non-standard metrics; and the founders and early investors took out 80% of the money raised even before the IPO. https://en.m.wikipedia.org/wiki/Groupon#Initial_public_offering https://en.m.wikipedia.org/wiki/Groupon#Initial_public_offer...
- humaniania 5y ago
  Oil companies and their suppression of climate change science.
- stagger87 5y ago
  MoviePass
  - mardifoufs 5y ago
    Movie pass was literally a loss for the vast majority of its investors. If anything it was a wealth transfer from the public/private market to the app users who got extremely subsidized movie tickets. Moviepass was a total loss for it's investors, so how does that not prove the opposite of what's being argued here
    - deleted 5y ago
      [deleted]
    - deleted 5y ago
      [deleted]
    - stagger87 5y ago
      I'm pretty sure early investors cashed out in 2017.
- rsynnott 5y ago
  Enron, to some extent.
- stickfigure 5y ago
  The hard part here is "ultimately shown to be dishonest" - who is privy to what is said in boardrooms and sale negotiations? How about just examples where the investors managed to get out just before the bubble popped? The canonical example would be Broadcast.com, which made Mark Cuban a billionaire. https://en.wikipedia.org/wiki/Broadcast.com https://en.wikipedia.org/wiki/Broadcast.com 1998 IPO at $1B valuation 1999 bought by Yahoo! for $5.7B 2002 shut down
- effingwewt 5y ago
  uBeam.
spaceflunky 5y ago
This sounds plausible, but as someone else said, has this ever been proven to be the case? What are some good examples?
olalonde 5y ago
But in the end, it's such a gamble that I'm skeptical any of the investors knew or suspected fraud when they initially invested. I've heard of exits for companies without a business model or revenue, but how many companies have an exit event (e.g. get acquired or IPO) with no product at all?
- akiselev 5y ago
  > I've heard of exits for companies without a business model or revenue, but how many companies have an exit event (e.g. get acquired or IPO) with no product at all? Depends on your definition of "no product at all" but it happens all the time in biotech. Most biotech companies don't have a product until FDA approval because they can't legally sell anything (unless it's a product other biotech/pharma companies can use for their own R&D).
gruez 5y ago
>The goal is to invest in a company that reaches a valuation high enough to let them recoup their investment at a profit. Alternatviely, they want to invest in insane companies/founders on the off chance that they actually make it. >But another theory is: No, those investors really want to be lied to. Those investors are holding a competition of the form “who can sound the most excited and persuasive and crazy when they lie to us,” and they give their money to the winner. They wouldn’t put it quite that way. But what the investors want is a fantasist, a wild-eyed dreamer, a visionary who sees the world not as it is but as it could be. They want someone who looks at $1 million in revenue and sees $10 million. They want someone who looks at some blueprints for an electric truck and sees hundreds rolling off the production line. They want someone who looks at a finger-prick blood test that doesn’t work and sees one that does work. They want someone who believes in something that nobody else believes in, an out-of-consensus visionary who wants to change the world. Obviously obviously obviously they would prefer it if this person’s wild belief comes true, if she succeeds in changing the world. But the first step is to back founders with crazy ideas. And then if one of them works out, that pays for 10 that are just crazy. >This theory is also well supported! Lots of venture capitalists will say it out loud! But also, like, man, look at the entire history of SoftBank Group Corp. Look at how SoftBank’s Masayoshi Son met WeWork’s Adam Neumann, and Neumann pitched him on some vision of office-space-rental changing the world, and Son gave Neumann $3.1 billion. And, famously, “Mr. Neumann has told others that Mr. Son appreciated how he was crazy—but thought that he needed to be crazier.” You don’t say that and then turn around and check every line of the financial projections for exaggerations and unjustified assumptions. If you invest in startups by (1) meeting crazy people and (2) telling them to be crazier, your main investment criterion is not scrupulous accuracy. https://www.bloomberg.com/opinion/articles/2021-08-31/theranos-trial-elizabeth-holmes-was-a-lottery-ticket-for-investors https://www.bloomberg.com/opinion/articles/2021-08-31/theran...
cryptica 5y ago
This is spot on. Investors don't give a damn about the business. They just want a machine that they put money in and more money comes out. I wouldn't be surprised if a lot of fast growing businesses these days are frauds. In such environment, the less they know, the better. Only frauds can succeed in a monetary system which is itself founded on fraud. So it makes no sense to do due diligence if you know that the company is all hooked up to the money printers because the business doesn't matter. Only the money printer and the business' connection to it matters; everything else is a nuisance. The business of almost every company in the tech sector these days is the 'capture the newly printed fiat money business.' Any other narrative is fake and only used to create a facade of legitimacy for the company. No company will ever admit that their main line of business is 'government contracts', 'government grants', 'laundered credit from shell companies', 'foreign money laundering', etc...
- Radim 5y ago
  You're not wrong but… it's pretty disheartening. Do you see a way out? For businesses that want to minimize their reliance on the (trickle-down scraps of) the fraud money business.
  - cryptica 5y ago
    I think the economy has become overly financialized - It has become too difficult to earn income through value creation and too easy to earn income through financial schemes - People are realizing this and giving up on value creation en mass. Fraud has become institutionalized (and therefore legalized). IMO, the financial system has already suffered irreparable damage to its reputation. I think there might be calls for asset seizures and redistribution soon. In the US, the BLM movement has already been campaigning for 'financial reparations'. South Africa just passed a law to allow land to be seized by the government without compensation. I think this might become more widespread - Hopefully it will only be restricted to specific assets; I think big corporate stocks are a likely target for expropriation because they have benefited the most from money printing; it will be easy for people to find evidence of wrongdoing and use it as a basis to seize and redistribute shares (or simply nationalize the companies altogether). My gut feeling is that we're headed to some kind of partial-communist government - First, they will only seize the assets related to big finance, big tech, big pharma since this will have public support. Maybe later once the public has warmed up to the new form of government, the government will be able to make a move on all private property.
ur-whale 5y ago
To push this line of reasoning one step further: Therano's CEO's entire strategy seems to have been "fake it till you make it". In other words, many an actually useful/profitable companies was started on an idea that was known to be impossible from the get-go, but they amass enough capital, visibility and momentum that they can later "pivot" to something that actually works. Whether that scenario falls in the "fraud" bucket is an interesting question.

avalys 5y ago

Can you provide any examples of a high-profile company, ultimately shown to be dishonest, where the early investors were able to “cash out” before this dishonesty became known?

hef19898 5y ago
Depends on what you call early. Nikola and WeWork come to mind, I assume Newman wasn't the only one to cash out early enough during one of the founding rounds.
ta1234567890 5y ago
Uber Explanation, since this is being downvoted. Uber might not have lied about their business, but it surely looks like investors never cared about the businesses viability and rather only cared about being able to turn a profit on their investment (which was the point being made by the gp). To this day, it is still not clear if Uber’s business model is viable. Also not to mention the original CEO/founder’s reputation and attitude, which the investors also didn’t care about until it became too big of a scandal. Additionally, the investors didn’t even care that Uber was technically illegal (same as Airbnb btw). Some references: https://techcrunch.com/2021/02/12/will-ride-hailing-profits-ever-come/ https://techcrunch.com/2021/02/12/will-ride-hailing-profits-... https://www.marketwatch.com/story/uber-and-lyft-are-staging-a-ridiculous-race-for-fake-profits-11628205337 https://www.marketwatch.com/story/uber-and-lyft-are-staging-... https://www.businessinsider.com/uber-company-scandals-and-controversies-2017-11#january-2012-uber-gets-slammed-in-its-first-major-surge-pricing-backlash-2 https://www.businessinsider.com/uber-company-scandals-and-co...
- eli 5y ago
  A dishonest company in other ways too. They sent drivers and riders misleading information about any local attempts to regulate them in the slightest. When they first launched UberX in DC, I called them out for a price comparison of Taxi vs UberX that couldn't possibly be true. They quietly changed the blog post and marketing materials shortly after.
- Alex3917 5y ago
  > which the investors also didn’t care about until it became too big of a scandal More like investors didn't care until they needed liquidity.
- supperburg 5y ago
  The idea that Uber is not profitable is a myth isn’t it? I remember they posted some financial documents a while back that showed them in the red. But when I looked at the papers there were literal billions in advertising and expansion. Uber runs the app. People call an Uber and they pay money. Some of that money goes to the driver and some goes to Uber. You’re really saying that Uber can’t collect enough money to run their computers and pay some staff? It just doesn’t make sense. Of course they can.
  - ta1234567890 5y ago
    > The idea that Uber is not profitable is a myth isn’t it? No, it’s a financial/accounting fact expressed by Uber themselves in their filings as a public company. Having a business model (which is what you are describing), doesn’t make it profitable. Hertz had a business model too, they owned cars, people rented cars and paid money for that. Are you saying Hertz couldn’t collect enough money to run their operations and pay some staff? Well they couldn’t, and they went bankrupt. They were also in the red for several years before the pandemic hit.
  - dogman144 5y ago
    Collecting enough money to pay staff/run servers != profitable. You're asking a cash flow vs. a income statement question. With enough cash flow, yes, can achieve any sort of operational expense that you're referring to. Uber still hasn't turned a profit, and might be able to soon via some creative accounting: https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-fake-profit-1847716786 https://gizmodo.com/uber-says-its-on-track-to-maybe-make-a-f...
edot 5y ago
WeWork and Nikola come to mind. Robinhood depending on if you consider purporting yourself to be “stealing from the rich, giving to the poor - Robinhood”, but you actually take orders from Citadel to be fraud. I think a lot of recent IPOs will turn out to be fraud-lite, in which it is shown over the next decade that these companies were pump and dumps that never actually do anything. They look just good enough to garner investment at IPO for initial investors to cash out. Most any company with ML or AI in their branding, running stupid amounts of CNBC ads and repeating their AI name 30 times during the ad.
- mrkramer 5y ago
  WeWork and Theranos were selling hype no real solution or service. They seem like companies from dot com bubble era, I thought tech investors got smarter but they are still as stupid as they were 30 years ago.
  - jollybean 5y ago
    WeWork is different than Theroanos. People actually rented WeWork properties and got a valuable service. The problem was more or less shenanigans on the Exec. side, and unsustainable financial situation. In that case, the 'consumers' actually end up ahead, with a cheaper services than otherwise, then investors lost.
    - HWR_14 5y ago
      >WeWork is different than Theroanos. From my understanding, WeWork was more of a working business that was overvalued and had a lot of self-dealing with the CEO (which I would characterize as embezzling, but may not legally have been.) Theranos invested their money in trying to make an impossible product, lying and failing at it the whole time. But I could be wrong, sensationalist news headlines and such.
      - jollybean 5y ago
        I believe this is correct.
exogeny 5y ago
MagicLeap, Groupon, Nikola, WeWork, Uber.. A company doesn't have to have an exit for early investors to get out. You just need to find a sucker to buy into a round later than you. How to do that, in the modern context, is pretty clear. Either do it through outright fraud (Theranos, Nikola, MagicLeap), extreme FOMO (MagicLeap), or raising so much that you crush competition despite comically bad fundamentals and never get to unit-profitability (Uber, others).
kingTug 5y ago
Robinhood
jborichevskiy 5y ago
Enron, for one https://en.wikipedia.org/wiki/Enron#Peak_and_decline_of_stock_price https://en.wikipedia.org/wiki/Enron#Peak_and_decline_of_stoc...
- sircastor 5y ago
  This is the first one that came to mind for me.
guiriduro 5y ago
Most, if not all SPACs.
danans 5y ago
Still unfolding, but Lordstown Motors looks like exactly that. https://hindenburgresearch.com/lordstown/ https://hindenburgresearch.com/lordstown/
nosianu 5y ago
Do cigarette companies lying about health effects of smoking and Big Oil doing the same about climate change count? Just example links, I think I'm not making any outrageous claims but that this has long been established and discussed here too many times: https://stopswithme.com/exposing-big-tobacco/big-tobacco-found-guilty/ https://stopswithme.com/exposing-big-tobacco/big-tobacco-fou... https://www.theguardian.com/environment/2021/jun/30/climate-crimes-oil-and-gas-environment https://www.theguardian.com/environment/2021/jun/30/climate-... The investors already got theirs many times over. I think you could also include any company that left what became a "super fund site" (US name, similar in other countries). They cannot have believed creating and leaving all that toxic waste in the ground would be a neutral action.
michael1999 5y ago
Groupon.
- elkos 5y ago
  I remember the company/service but I'm unfamiliar with the unfolding of the company.
  - michael1999 5y ago
    They launched their IPO while marginal revenue was still solidly negative; published a bunch of non-standard metrics; and the founders and early investors took out 80% of the money raised even before the IPO. https://en.m.wikipedia.org/wiki/Groupon#Initial_public_offering https://en.m.wikipedia.org/wiki/Groupon#Initial_public_offer...
humaniania 5y ago
Oil companies and their suppression of climate change science.
stagger87 5y ago
MoviePass
- mardifoufs 5y ago
  Movie pass was literally a loss for the vast majority of its investors. If anything it was a wealth transfer from the public/private market to the app users who got extremely subsidized movie tickets. Moviepass was a total loss for it's investors, so how does that not prove the opposite of what's being argued here
  - deleted 5y ago
    [deleted]
  - deleted 5y ago
    [deleted]
  - stagger87 5y ago
    I'm pretty sure early investors cashed out in 2017.
rsynnott 5y ago
Enron, to some extent.
stickfigure 5y ago
The hard part here is "ultimately shown to be dishonest" - who is privy to what is said in boardrooms and sale negotiations? How about just examples where the investors managed to get out just before the bubble popped? The canonical example would be Broadcast.com, which made Mark Cuban a billionaire. https://en.wikipedia.org/wiki/Broadcast.com https://en.wikipedia.org/wiki/Broadcast.com 1998 IPO at $1B valuation 1999 bought by Yahoo! for $5.7B 2002 shut down
effingwewt 5y ago
uBeam.

spaceflunky 5y ago

This sounds plausible, but as someone else said, has this ever been proven to be the case? What are some good examples?

olalonde 5y ago

But in the end, it's such a gamble that I'm skeptical any of the investors knew or suspected fraud when they initially invested. I've heard of exits for companies without a business model or revenue, but how many companies have an exit event (e.g. get acquired or IPO) with no product at all?

akiselev 5y ago
> I've heard of exits for companies without a business model or revenue, but how many companies have an exit event (e.g. get acquired or IPO) with no product at all? Depends on your definition of "no product at all" but it happens all the time in biotech. Most biotech companies don't have a product until FDA approval because they can't legally sell anything (unless it's a product other biotech/pharma companies can use for their own R&D).

gruez 5y ago

>The goal is to invest in a company that reaches a valuation high enough to let them recoup their investment at a profit. Alternatviely, they want to invest in insane companies/founders on the off chance that they actually make it. >But another theory is: No, those investors really want to be lied to. Those investors are holding a competition of the form “who can sound the most excited and persuasive and crazy when they lie to us,” and they give their money to the winner. They wouldn’t put it quite that way. But what the investors want is a fantasist, a wild-eyed dreamer, a visionary who sees the world not as it is but as it could be. They want someone who looks at $1 million in revenue and sees $10 million. They want someone who looks at some blueprints for an electric truck and sees hundreds rolling off the production line. They want someone who looks at a finger-prick blood test that doesn’t work and sees one that does work. They want someone who believes in something that nobody else believes in, an out-of-consensus visionary who wants to change the world. Obviously obviously obviously they would prefer it if this person’s wild belief comes true, if she succeeds in changing the world. But the first step is to back founders with crazy ideas. And then if one of them works out, that pays for 10 that are just crazy. >This theory is also well supported! Lots of venture capitalists will say it out loud! But also, like, man, look at the entire history of SoftBank Group Corp. Look at how SoftBank’s Masayoshi Son met WeWork’s Adam Neumann, and Neumann pitched him on some vision of office-space-rental changing the world, and Son gave Neumann $3.1 billion. And, famously, “Mr. Neumann has told others that Mr. Son appreciated how he was crazy—but thought that he needed to be crazier.” You don’t say that and then turn around and check every line of the financial projections for exaggerations and unjustified assumptions. If you invest in startups by (1) meeting crazy people and (2) telling them to be crazier, your main investment criterion is not scrupulous accuracy. https://www.bloomberg.com/opinion/articles/2021-08-31/theranos-trial-elizabeth-holmes-was-a-lottery-ticket-for-investors https://www.bloomberg.com/opinion/articles/2021-08-31/theran...

cryptica 5y ago

This is spot on. Investors don't give a damn about the business. They just want a machine that they put money in and more money comes out. I wouldn't be surprised if a lot of fast growing businesses these days are frauds. In such environment, the less they know, the better. Only frauds can succeed in a monetary system which is itself founded on fraud. So it makes no sense to do due diligence if you know that the company is all hooked up to the money printers because the business doesn't matter. Only the money printer and the business' connection to it matters; everything else is a nuisance. The business of almost every company in the tech sector these days is the 'capture the newly printed fiat money business.' Any other narrative is fake and only used to create a facade of legitimacy for the company. No company will ever admit that their main line of business is 'government contracts', 'government grants', 'laundered credit from shell companies', 'foreign money laundering', etc...

Radim 5y ago
You're not wrong but… it's pretty disheartening. Do you see a way out? For businesses that want to minimize their reliance on the (trickle-down scraps of) the fraud money business.
- cryptica 5y ago
  I think the economy has become overly financialized - It has become too difficult to earn income through value creation and too easy to earn income through financial schemes - People are realizing this and giving up on value creation en mass. Fraud has become institutionalized (and therefore legalized). IMO, the financial system has already suffered irreparable damage to its reputation. I think there might be calls for asset seizures and redistribution soon. In the US, the BLM movement has already been campaigning for 'financial reparations'. South Africa just passed a law to allow land to be seized by the government without compensation. I think this might become more widespread - Hopefully it will only be restricted to specific assets; I think big corporate stocks are a likely target for expropriation because they have benefited the most from money printing; it will be easy for people to find evidence of wrongdoing and use it as a basis to seize and redistribute shares (or simply nationalize the companies altogether). My gut feeling is that we're headed to some kind of partial-communist government - First, they will only seize the assets related to big finance, big tech, big pharma since this will have public support. Maybe later once the public has warmed up to the new form of government, the government will be able to make a move on all private property.

ur-whale 5y ago

To push this line of reasoning one step further: Therano's CEO's entire strategy seems to have been "fake it till you make it". In other words, many an actually useful/profitable companies was started on an idea that was known to be impossible from the get-go, but they amass enough capital, visibility and momentum that they can later "pivot" to something that actually works. Whether that scenario falls in the "fraud" bucket is an interesting question.