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

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.

Why is it all we here about from worthless news is

[hsmith]

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.

Re:

[Frosty Piss]

Here / Hear...

Because we don't really regulate companies

[rsilvergun]

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.

Re:

[Actually, I do RTFA]

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!

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[gweihir]

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

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[gweihir]

A "honest question" you do not intend to hear the answer to? Talk about being a liar and stupid.

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[exomondo]

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.

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[gravewax]

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)

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[exomondo]

They apparently have in the order of $200 million [wsj.com] in cash on hand. Plenty to settle those lawsuits.

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[ShanghaiBill]

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.

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[exomondo]

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.

Huh? the people who had fake blood tests from Elizabeth Holmes run on them with fake results [slashdot.org] were shareholders who control the board?

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[youngone]

Once again the conservative sandwich-heavy portfolio pays off for the hungry investor!

Lock her up already

[quonset]

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:

[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.

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[Hognoxious]

Qui Bono?

Qua Sinead O'Connor?

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[msauve]

"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.

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[rtb61]

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...

[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?

Re: Maybe not...

[cunina]

http://villains.wikia.com/wiki... [wikia.com] I think this explains a lot.

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[BarbaraHudson]

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

Re:

[BarbaraHudson]

Homolka's lawyer knew where the tapes where but didn't reveal the location to police, instead cutting a deal with the crown. Kind of hard to go back on the deal, since she wasn't the one withholding evidence, and the lawyer isn't required to disclose evidence that can convict his client.

But yes, women do tend to get lighter sentences. Parents starved their kid to death, withheld all medical treatment, the mother got house arrest while the father went to jail for a few months. WTF??? (Fortunately, the sente

Re:

[BarbaraHudson]

She left the country after hiding in Quebec under another name. But yes, her and Paul Bernardo are two people, who if they were on fire, nobody would bother to waste the piss to put it out.

My problem with the whole thing is the same as with Dr. Guy Turcotte, the cardiologist who killed his children. There are some crimes that, even if intentional and premeditated, you really have to have more than a few screws loose to have committed. They simply go beyond all understanding. You can't fix sh*t like that. E

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[BarbaraHudson]

Propaganda IS lying. That you don't see it just goes to show how far the rot has set in.

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[youngone]

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.

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[BinBoy]

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.

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[youngone]

Yes, the lack of glasses was the missing piece, without which the whole thing failed.

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[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

Re:

[JaredOfEuropa]

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

[BarbaraHudson]

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

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[HornWumpus]

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.

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[BarbaraHudson]

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?

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[swillden]

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

Re:

[BarbaraHudson]

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.

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[swillden]

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.

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[BarbaraHudson]

The tax department won't accept anything short of disposal of the shares for him to realize the loss.

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[Gumbercules!!]

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.

The whole thing seems fake

[js290]

Elizabeth Holmes seems like an actress fronting a ponzi scheme.

Re:

[BarbaraHudson]

Right because women have a monopoly on fuckin up companies. /sarcasm

Well, men certainly have a pretty strong record of f*cking up countries. Though the UK's May is going for the silver (Trump has a lock on the gold).

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[BarbaraHudson]

He's doing exactly what I figured he'd do - wrecking the republican tea-party by trying to give them exactly what they want. Just goes to show - be careful what you wish for.

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[phantomfive]

Looks like he might trash the US' healthcare system, but from what I hear, that was never really available to most people in the first place.

The vast majority of Americans have access to healthcare. The vast majority of poor people can/do get medicaid. There's just a small sliver of people in the space between "poor enough for medicaid" and "rich enough to get employer paid insurance" where people have trouble.

The other difficulty is when you quit your job (while looking for a new one, or taking a break, or whatever), insurance can lapse.

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[phantomfive]

As one of the 50% percent who never goes to the dentist, I can assure you it has nothing to do with cost. The percentage without healthcare is at 9% [businessinsider.com].

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[thomn8r]

What you're missing here is that a huge part of the "success" of Theranos hinged on the Cinderella story of a brilliant young woman creating her own company from scratch. We now know that it was all bullshit, but she took that narrative to the bank. People seem to be reluctant to call out attractive women on their bullshit #include <marissa_mayer.h>

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[BarbaraHudson]

She's "paying" them with worthless shares.

Here...

[jlowery]

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

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[Brett Buck]

How come this $100 bill has Jefferson Davis' picture on it?

Old Joke

[Brett Buck]

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

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[account_deleted]

Comment removed based on user account deletion

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[HornWumpus]

I don't think you know what the word 'cornered' means in market context.

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[GerryHattrick]

For balance, remember Ann Wojcicki, semi-detached from a Google founder through no fault of her own, who co-founded cheery '23andMe' for web-friendly genetic testing, got hit by the full might of the US's 'FDA' and came out smiling with a new-style offering that is compliant. As one North American school says in its motto 'Girls CAN do anything' (maybe only some of them).

Jail

[phantomfive]

She isn't in jail yet? It seems like textbook case of fraud.

Once again the Simpsons were right

[HockeyPuck]

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

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

Makes sense

[drolli]

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...

[mhkohne]

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.