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Major Investor Sues Theranos

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Re: Major Investor Sues Theranos

#71

Post by maverick_iceman »

balls187 wrote: post #48
dsacco wrote: post #25

Earlier quoted context omitted.

Hedge funds frequently have charitable foundations and pension funds as limited partners. Unless the hedge fund is just a family office, there's a high probability that the "little guy" will be impacted, somewhere. I can't tell you if your schadenfreude over hedge funds losing money is right or wrong, because that's based on normative values. But I'd encourage you to adjust your understanding of the financial dynamic…

But if the Theranos deal panned out, who would have benefited from the investment by the hedgefund? Would it be the "little guy?" Or would it be the fund managers, and all the "insiders." It goes hand and hand with the notion that the system is rigged.

^Spotted a Bernie fan. :)

Re: Major Investor Sues Theranos

#72

Post by Fricken »

astaroth360 wrote: post #51

Isn't her activity like the textbook definition of fraud? Not to mention the dude who she basically pushed into committing suicide. I hope she gets at least as much time as Madoff.

What Madoff did was illegal and malicious from the outset.

Do you believe that when Holmes was handed the opportunity, at 19, to bring the Edison to market that she set out with the intent of defrauding investors?

The only thing she's provably guilty of thus far is believing in her company a little more than is sensible and being preternaturally competent as a fundraiser.

When Musk claims he can get people to Mars for $200k, do we say 'That's preposterous!', and slap him in cuffs? It's up to the investors of Spacex to decide whether or not they want to gamble on that proposition.

Would you put 100 million into Magic Leap because Rony Abovitz says 'it's rad', or would you insist on seeing a demo first? Because none of Theranos investors did that.

Re: Major Investor Sues Theranos

#73

Post by pcurve »

Fricken wrote: post #36
garrincha wrote: post #4

I have a feeling that this level of lying is much more pervasive in startups than people realize.

The managers of this hedge fund handed over $100 million dollars in other people's money without so much as a whiff of due diligence. There are 13 major life sciences venture capital firms and not one of then would touch Theranos with a ten foot pole. You'd think, in theory, that whomever it was at Partner Management LP who makes the big investment decisions would make a few phone calls first before deciding to pull…

Exactly. parking 2.5% of its total capital in Theranos deserves suits from its own investors.

Re: Major Investor Sues Theranos

#74

Post by alexqgb »

Fricken wrote: post #72
astaroth360 wrote: post #51

Isn't her activity like the textbook definition of fraud? Not to mention the dude who she basically pushed into committing suicide. I hope she gets at least as much time as Madoff.

What Madoff did was illegal and malicious from the outset. Do you believe that when Holmes was handed the opportunity, at 19, to bring the Edison to market that she set out with the intent of defrauding investors? The only thing she's provably guilty of thus far is believing in her company a little more than is sensible and being preternaturally competent as a fundraiser. When Musk claims he can get people to Mars fo…

The fact that Madoff's intent was criminal from the outset and that Holmes' probably wasn't is irrelevant. The point is that it became criminal. And that's why she's in the firing line today.

Re: Major Investor Sues Theranos

#75

Post by edoceo »

sytse wrote: post #21
mikeryan wrote: post #17

Not that I'm surprised that the firm sued but I wonder what their end goal is and how they're planning on getting any sort of meaningful settlement from a company that's currently on fire. This seems mostly a face-saving measure.

Theranos raised $348.5M Private Equity on March 1, 2015. There is probably still cash on the balance sheet. Maybe by filing a suit they hope that the company will be liquidated and to be at the front of the line when the proceeds get split.

Once the suit is filed it also forces the CEO to behave differently, legally in terms of financial responsibility. Away from company&employees to investors. So I've read. I'm not a lawyer.

Re: Major Investor Sues Theranos

#76

Post by chrsstrm »

jondubois wrote: post #43
garrincha wrote: post #4

I have a feeling that this level of lying is much more pervasive in startups than people realize.

I think humanity is literally evolving to lie and cheat at a biological level. Soon, universities will have courses in 'Mastering the art of cheating and lying'.

  >I think humanity is literally evolving to lie and cheat at a biological level.
It's naive to think we were not already born with these core qualities. "Survive at all costs" is a demonstrated maxim that all living beings possess. We didn't consider lying and cheating to be frowned upon until we decided we were a civilized society with rules based on [opinions | deities | etc.]. Having experienced multiple pathological liars firsthand, it makes more sense that rather than "evolving" these qualities, people are resorting to their core human nature as they feel more and more threatened.

Re: Major Investor Sues Theranos

#77

Post by lmartel »

Fricken wrote: post #72
astaroth360 wrote: post #51

Isn't her activity like the textbook definition of fraud? Not to mention the dude who she basically pushed into committing suicide. I hope she gets at least as much time as Madoff.

What Madoff did was illegal and malicious from the outset. Do you believe that when Holmes was handed the opportunity, at 19, to bring the Edison to market that she set out with the intent of defrauding investors? The only thing she's provably guilty of thus far is believing in her company a little more than is sensible and being preternaturally competent as a fundraiser. When Musk claims he can get people to Mars fo…

There's a difference between saying "I believe we can develop X" and "we currently have X." As I understand it, Holmes and Theranos did the latter. And that's fraud.

Re: Major Investor Sues Theranos

#78

Post by enjo »

rayiner wrote: post #70
astaroth360 wrote: post #51

Isn't her activity like the textbook definition of fraud? Not to mention the dude who she basically pushed into committing suicide. I hope she gets at least as much time as Madoff.

There is civil fraud and criminal fraud, which require proving the same things. But generally, the government will only pursue criminal fraud prosecutions when there is a public interest component. Madoff defrauded a large number of people, and his fraud affected little old ladies' pensions. The government will generally stay out of fraud directed at a handful of sophisticated investors.

It seems like clear fraud was directed at the general public and their health outcomes. I don't care much about the investors, they can take it. It was something like 6% of tests were fraudulently performed by their "technology", with potentially dangerous results.

Re: Major Investor Sues Theranos

#79

Post by alexqgb »

hkmurakami wrote: post #12
julianpye wrote: post #6

One thing I find really weird is the choice of CEO photos in media reporting. If there is good news, they chose 'nice', attractive photos. If there is bad news, they look for worse ones. This is true for male and female founders. In this case, everything about this photo is an 'outtake', from hands, choice of framing, facial expression, eyes - it's a photo a photographer would not keep in their image selection.

Why is that weird? The photo choice manipulates the reader impression just as they intend. Perhaps what you might mean is something like "disingenuous" or "biased" or "unethical"

Alternately, it reflects the tenor of the story and the facts it contains. You could say this is inappropriate editorializing, but that makes the obviously absurd implication that fraud is a neutral thing, and that there are many good kinds of fraud in additional to the bad ones.

If you're reporting clear facts about something unambiguously bad, then it's entirely appropriate for the supporting photographs to support the article.

Re: Major Investor Sues Theranos

#80

Post by jupiter90000 »

If one assumes Holmes didn't realize their product didn't work (questionable at best), imagine how it must be to work 7 days a week, forego friendships and intimate relationships, and not even watch TV, then after 12 years of that discover what you tried to make didn't/won't work. In too deep or something to just admit it's over and move on.

Sounds like a very undesirable number of years with little positive to show, although maybe there were some lessons in there. Maybe time for a workaholic recovery program for her, who knows. Sad to hear the prime of a life spent like this... though perhaps not any worse than other destructive paths one could travel.

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