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Biotech Businesses Medicine The Courts

Theranos To Investors: Please Don't Sue! Here, Have Some More Shares (siliconbeat.com) 86

Posted by EditorDavid from the fumbling-founders dept.
Theranos "plans to give additional shares to investors who pledge not to sue," reports the Wall Street Journal. An anonymous reader quotes Silicon Beat: The deal, which hasn't been disclosed publicly, was approved by the Palo Alto-based company's board last month, The Wall Street Journal reported, citing anonymous "people familiar with the matter." They said most investors have tentatively agreed to the deal. Those extra shares are coming from none other than founder and CEO Elizabeth Holmes' personal cache, the Journal reported. That means the beleaguered founder, who has remained stubbornly at the helm of her struggling startup even though federal regulators have barred her from running a medical lab for two years, would give up her majority ownership in the company.
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Theranos To Investors: Please Don't Sue! Here, Have Some More Shares More

Theranos To Investors: Please Don't Sue! Here, Have Some More Shares

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  • Why is it all we here about from worthless news is (Score:5, Insightful)

    by hsmith ( 818216 ) on Sunday March 26, 2017 @11:39AM (#54113135)
    how badly investors were harmed? How about the people who had fake blood tests from Elizabeth Holmes run on them with fake results? She should be in prison.

    • Here / Hear...

    • in America. We pretend to. We've been attacking 'useless bureaucracy' for 30+ years. Mostly because we don't like waiting in line t the DMV. But instead of shorter lines for our kids' drivers license we get phony medicine and lead in our water.

      • But instead of shorter lines for our kids' drivers license we get phony medicine and lead in our water.

        Sucker! I got phony medicine, lead in the water, and shorter DMV lines!

    • Re: (Score:1, Troll)

      by gweihir ( 88907 )

      Naaa, she is Wonder Woman and according to Feminist Theory, it cannot have been her fault!

    • How about the people who had fake blood tests from Elizabeth Holmes run on them with fake results

      There are ongoing lawsuits. Frankly an offer of effectively worthless shares in the company that did fake blood tests on you would be pretty offensive.

      • The problem becomes if they are suing a company with no value then the lawsuit is also worthless, Shares while probably worth the same perhaps has some "gambling" value if a miracle occurs and one of her scientists comes up with some amazing product or even creates the test (unlikely but then so is getting money from a lawsuit of a worthless company)

      • Theranos is a PRIVATELY held company. There are only a handful of shareholders, and they already control the board. So they would just be suing themselves.

  • Lock her up already (Score:5, Insightful)

    by quonset ( 4839537 ) on Sunday March 26, 2017 @11:47AM (#54113199)

    This scam has gone on long enough. Holmes has never subjected her tests to government scrutiny, nor allowed anyone to try and replicate the results. And there's a good reason for that. Her tests don't work. Her own labs don't even use the tests. They use standard, verified, tests to do their work.

    Holmes has done nothing over the years to show she has any intention of providing a real service. All she's done is bleed investors of their money.

    Anyone who thinks getting shares of this scam company will somehow make the problems go away is delusional.

    • Re: (Score:1)

      by Anonymous Coward

      . All she's done

      Holmes was far from he only person involved in the Theranos catastrophy. From management, to employees, to (celebrity) directors, to government regulators and especially to promotional "allies" in the media, a minor industrial chain of scammers conspired to keep Theranos flying on fumes and bullshit for 10 years.

      Now that same machine is seeking at all cost to pin 100% of the blame on the borderline mental patient who fronted the scam. Qui Bono? Up and down. Never overlook the media.

    • Re: (Score:2)

      by msauve ( 701917 )
      "All she's done is bleed investors of their money."

      They needed to get the blood for testing from somewhere. Since investors have dried up, they're now working on squeezing blood from a stone.

      • Re: (Score:3)

        by rtb61 ( 674572 )

        Bleed the investors, you have to be joking. Those investors were scum insiders who were expecting to cash in on the IPO. They knew full well the whole thing was one giant fucking scam and were in on it from the beginning, it just all blew up before they could cash in on the multibillion dollar IPO. Now like rats abandoning a sinking ship, they want to take as much as they can and fuck the other investors. A scam from the get go planned and plotted by a psychopath and a bunch of other insider psychopaths joi

    • Maybe not... (Score:1)

      by Anonymous Coward

      Women aren't liars and thieves like men are. She's probably just been scammed herself by her employees who lied to her about their results, and now she is trying to set that right.

      Haven't you seen her picture [wikipedia.org]? See how pretty, friendly, and trustworthy she looks? Honestly, does she look like a liar and a thief to you?

      • Women aren't liars and thieves like men are. She's probably just been scammed herself by her employees who lied to her about their results, and now she is trying to set that right.

        >

        Leona Hemsley - "taxes are for little people." Mata Hari, Tokyo Rose, mass murderer Jane Toppan (31 victims) [wikipedia.org], Nannie Doss (11 killings) [wikipedia.org], Miyuki Ishikawa (103) [wikipedia.org], Juana Barraza (dozens) [wikipedia.org], Dagmar Overbye (up to 25) [wikipedia.org], and in goody two-shoes Canada, Karla Hololka [wikipedia.org], who raped and killed her sister and two others with the help of her husband Paul Bernardo, and currently, former nurse Elizabeth Wettlaufer is accused of murdering 8 patients in nursing homes via insulin injections [www.cbc.ca].

        None of this changes the fact that the

      • Honestly, does she look like a liar and a thief to you?

        Of course not, and the black turtle-necks she wears show what a visionary she is, because visionaries wear black turtle-necks.

        • Re: (Score:1)

          by BinBoy ( 164798 )

          Of course not, and the black turtle-necks she wears show what a visionary she is, because visionaries wear black turtle-necks.

          If she was actually that smart, she'd wear glasses.

    • Re: (Score:1)

      by Anonymous Coward

      It's not clear that Holmes and Theranos did anything criminal, or that this was in the same league as Enron and the wave of accounting scandals that surfaced around the time of the dotcom bubble 15-20 years ago.

      What Theranos did was say, "no, you can't see the details, but trust us; good things are happening. We've got some of the brightest minds working on it."

      What Enron did was say: "We made $1 billion last quarter, our accountants have verified it" (when actually they lost $3 billion) or something (I ma

    • At this stage, why wouldn't shareholders sue? Or are they hoping that some trust in the company can be restored is a lawsuit is averted, giving them an opportunity to unload their shares to another sucker in the future? Also, from TFA:

      Theranos also has reached an agreement to buy back Rupert Murdoch’s shares — which he bought in 2015 for about $125 million — for just $1

      Why would he do that? By estimates in the article the company's valuation dropped by 90%: a huge amount but it hardly makes Murdoch's holdings worthless. Seems fishy to me.

      • Re:Lock her up already (Score:4, Informative)

        by BarbaraHudson ( 3785311 ) <barbara DOT jane ... T icloud DOT com> on Sunday March 26, 2017 @01:05PM (#54113621) Journal
        Tax write-off. He knows the shares are worthless, so might as well realize the loss and use it to offset gains elsewhere.

        • That's good for the share s/he already has, but any shares gained in a lawsuit would start with the low/near zero value as basis.

          • People aren't asking for shares in the lawsuit - they want money (and blood). Why would anyone want more shares in a business that is subject to more lawsuits in the future? That defrauded them in the past?

        • Tax write-off. He knows the shares are worthless, so might as well realize the loss and use it to offset gains elsewhere.

          That makes no sense. Effective tax management means finding ways to report every possible loss, not creating actual losses just so you can report them. Creating $100 in actual losses to offset $100 in gains elsewhere lowers your tax liability by somewhere between $15 and $40, depending, which means you're actually throwing away $60-$85 in the process. Better to keep the gain and pay the tax.

          There may be reasons to want to realize the loss *now*, rather than in the future, but that could have been done by

          • Nonsense. He's disposing of them now because in his estimation there is no upside to owning them, but he can save money by declaring the full loss (the value he paid for them, not the current value) and save more on taxes than the current book value of the shares.
            • You didn't actually rebut my point at all. Maybe you need to re-read it. Selling for $1 is not his only option to realize the loss now.
      • My assumption is he wanted to distance himself from the situation as fast as he can. There's a clear lawsuit or more coming for this company, which is privately owned, not publicly, and being a major shareholder in a privately owned company that's getting super-sued is ?possibly? bad news. That was my assumption - he wants the hell out before it gets worse.
  • Elizabeth Holmes seems like an actress fronting a ponzi scheme.

  • Here... (Score:4, Funny)

    by jlowery ( 47102 ) on Sunday March 26, 2017 @11:58AM (#54113259)

    we'll give you millions of zero dollars. Feel better?

  • Old Joke (Score:4, Funny)

    by Brett Buck ( 811747 ) on Sunday March 26, 2017 @12:02PM (#54113291)

    "The chef burned the fries, so we gave you extra"

  • Comment removed (Score:4, Interesting)

    by account_deleted ( 4530225 ) on Sunday March 26, 2017 @12:03PM (#54113299)
    Comment removed based on user account deletion

  • Jail (Score:3)

    by phantomfive ( 622387 ) on Sunday March 26, 2017 @12:24PM (#54113429) Journal
    She isn't in jail yet? It seems like textbook case of fraud.

  • Once again the Simpsons were right (Score:4, Funny)

    by HockeyPuck ( 141947 ) on Sunday March 26, 2017 @01:37PM (#54113785)

    https://www.youtube.com/watch?v=arENYYkYBts [youtube.com]

    A dotcom company paying Lisa and Bart in shares...

  • The investors see that now they would only have to take the loss, since there is currently nothing to fetch. The company would immediately be bankrupt, the founder would be bancrupt, but it would not help the investors much. From their perspective the likeliness that the value of the company rises again is not zero and the current value is probably negligible.

  • Wow, that's a deal... (Score:4, Interesting)

    by mhkohne ( 3854 ) on Sunday March 26, 2017 @05:27PM (#54114883) Homepage

    This is...quite something. She's still in charge (and collecting a paycheck, presumably). She'll get rid of some of her shares, AND drop being majority stakeholder, so she can get fired by the board, instead of quitting, thus triggering whatever golden parachute she's got. If she's smart she'll sell off the rest of her shares before the whole things winds down.

    From the investor's side, I guess it makes sense - if they start suing, the lawyers probably end up with all the money, so just letting it play out might be their best hope for a return.

    Sigh. For all the problems it has (and the FDA has many), this kind of nonsense is why it exists in the first place.

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