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Major Investor Sues Theranos

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Re: Major Investor Sues Theranos

#221

Post by jacquesm »

FireBeyond wrote: post #220
jacquesm wrote: post #160

Earlier quoted context omitted.

That's a dumb argument then. See, when you do due diligence you should assume that the company lies. That's why you go there in the first place, if you believe everything they tell you then you're going to get fleeced if they lie. Theranos did not comply with their duty to inform truthfully, but the investors did not comply with their duty to research. Asking the company is not research, the technology being complex…

"It's not as if there is accounting with double bookkeeping that was withheld from you" If you present results that are cherry picked, or problematic in how they were obtained, how much of a practical difference is there to your example?

That they are still picked by the company. That makes them suspect to begin with.

Let me give you one sample of what DD entails:

If you're going to buy a factory with a warehouse in another town you could believe they have a warehouse in another town, or you could go there to look at the warehouse, make sure it's up and running and that there is stock roughly in accordance with what you were told. You check the ownership of the lot and the building if the company claimed it is their property. You count the number of employees, how many trucks there coming and going during your visit and what got loaded / unloaded.

Of course 99% of the time you'll find that everything is in order and that any errors are accidental or immaterial. But that 1% (actually, probably more than 1% but never mind) of the time where things are not as they should be you realize what DD is for.

It's not a rubberstamp, it is a verification that the picture the company painted was error free and complete.

Asking the company what the address of the warehouse is would in my opinion not be enough, even though you could assume that all is as it should be.

I've had the weirdest stuff surface during DD's, and I've had a few eyebrows raised for stuff like 'ok, I'll visit your warehouse tomorrow please alert them' (or other stuff in that vein) but for real companies with actual products and honest management this is never any problem, at most an inconvenience. Whenever there is significant pushback to such a request you can bet there is trouble and it usually doesn't take long after that to find something really bad (which typically signals end-of-deal).

Letting the company pick the examples or the results in the case of a company that provides test equipment is not an option, you'd want to walk in with your samples have them analyzed on the spot and follow the whole chain from entry to results and then you'd compare those results to a control that you possess. Anything less would not do.

Otherwise, why do DD at all? If you're going to go on what the company provided then you may as well skip DD and become a true believer.

Re: Major Investor Sues Theranos

#222

Post by nickpsecurity »

mozumder wrote: post #219
nickpsecurity wrote: post #213

Earlier quoted context omitted.

"That's pretty much what mainstream media does. That's why you see major investigative articles with lots and lots of cross-referenced sources." This is not what the mainstream media does. What it does is start with the biases and goals of the organization that targets the beliefs and wants of particular viewers. The journalists will have run into this trying to get things by editors in the past. Then, they'll begin…

Why would anyone support independent media's biases over mainstream media's biases? So I take it you don't want to thank mainstream media for uncovering the Theranos fraud?

Because mainstream media's biases are beholden to the companies and government people causing us many problems. They also self-suppress critical stuff that could result in reform if it had people's attention. They also have this weird habit of running and heavily covering shock stories when critical legislation or business events are happening, making citizens miss the chance to act on it.

A media more independent from corporate and government interests would have less of these issues. Especially suppression. Then it's just a matter of gauging accuracy and bias of each.

Re: Major Investor Sues Theranos

#223

Post by blahblah3 »

jacquesm wrote: post #155

I'm definitely not a friend of Theranos, but : they failed to do due diligence before investing, the error is theirs. I wonder if they would sue as well if Theranos had scored big time. If you treat investing as gambling don't sue if you lose a hundred million dollars of your customers money.

of course they wouldn't have sued if theranos had scored, that doesn't make their lawsuit invalid. companies should be accountable for the statements they make (see Enron)

Re: Major Investor Sues Theranos

#224

Post by mozumder »

nickpsecurity wrote: post #222
mozumder wrote: post #219

Earlier quoted context omitted.

Why would anyone support independent media's biases over mainstream media's biases? So I take it you don't want to thank mainstream media for uncovering the Theranos fraud?

Because mainstream media's biases are beholden to the companies and government people causing us many problems. They also self-suppress critical stuff that could result in reform if it had people's attention. They also have this weird habit of running and heavily covering shock stories when critical legislation or business events are happening, making citizens miss the chance to act on it. A media more independent fr…

And yet, it was mainstream media that exposed the Theranos fraud.

You're welcome.

Re: Major Investor Sues Theranos

#225

Post by poshli »

kbart wrote: post #186
jupiter90000 wrote: post #80

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,…

"Sounds like a very undesirable number of years with little positive to show" Hm, I wouldn't call 4.5$ billion "little". I would gladly work 7 days a week for 12 years for even much lesser amount.

Forbes recently decided the company had a value of near zero.

Re: Major Investor Sues Theranos

#227

Post by nickpsecurity »

mozumder wrote: post #224
nickpsecurity wrote: post #222

Earlier quoted context omitted.

Because mainstream media's biases are beholden to the companies and government people causing us many problems. They also self-suppress critical stuff that could result in reform if it had people's attention. They also have this weird habit of running and heavily covering shock stories when critical legislation or business events are happening, making citizens miss the chance to act on it. A media more independent fr…

And yet, it was mainstream media that exposed the Theranos fraud. You're welcome.

I didnt say they do nothing of benefit. I use them since they're most of what we have. Your claim also doesnt counter mine in any way. Large, well-funded, independent media wouldve done the same thing if we had that instead. Further, it would be more likely as MSM continues to shift from journalism to just sharing anything that will get views. Most MSM just copies stories of relatively few journalists since that generates the most ad revenue at the lowest cost.

Re: Major Investor Sues Theranos

#228

Post by ceterum_censeo »

jacquesm wrote: post #214
ceterum_censeo wrote: post #210

Earlier quoted context omitted.

> Then please provide some proof that proper DD was done. If you are stating that "they [investors] failed to do due diligence", then the onus is on you to provide proof that the proper DD was done if you don't want your argument referred to as speculation. I am not drawing a conclusion one way or the other. > The disruption came along one parameter only, the amount of blood required to do the test. That wasn't the o…

So far not a single investor has claimed that their DD team did not have access, that their DD team was competent to do the job in the first place and that the technology as evaluated was sound. You'll note that this whole lawsuit is about claims by the company, not about what they actually had or what the DD team encountered in the lab. > That wasn't the only disruption and I'm not sure that was the primary one: I w…

> So far not a single investor has claimed that their DD team did not have access, that their DD team was competent to do the job in the first place and that the technology as evaluated was sound.

This doesn't tell us one way or the other if DD took place and if so, the scope.

> The technology enabled that. Without the tech that failed to materialize and is not the core of the innovation that Theranos represents.

The technology is orthogonal to their regulatory machinations. They could have developed an in-house ELISA (or whatever, something more conventional) and made similar regulatory plays as they did with their microfluidics system.

> Yes, but if you run enough samples then you should converge at something amounting to statistical equivalence. If that doesn't happen then either one of the tests is invalid.

That handwaves over the complexity of the study, which goes to my point that your trivial and foolproof experiment is neither. A proper one probably needs a CRO. For a sizable investment it could be worthwhile, but I think you've underestimated the scope of your proposal.

> As are secrecy, refusing access to labs, not providing full details on the technology under NDA, refusing to run a sufficient number of blind tests at the request of the DD team.

Some of that in context isn't outside the behavior of other medical technology companies. It would be negligent to allow someone that wasn't with the government to walk through my lab without making some sort of arrangement ahead of time, and certainly under no circumstances unsupervised. I also have withheld key technical details to someone running DD despite having an NDA because NDAs cost money I didn't have to enforce if needed. The last item about testing is certainly a huge red flag, but [citation needed] if you're saying that Theranos did it (I find it possible to believe, but I haven't read that until your comment).

> If that were true that would mean they had working technology, which they did not have at all.

That might be an overstatement? I've followed this case closely, and I've had a very difficult time understanding what was claimed to work and did, what was claimed to work and didn't, what wasn't claimed by Theranos but is rumor transmuted into fact by the internet, etc. I've been operating under the assumption that the technology did work under controlled conditions and had problems when scaling up, but that is speculative on my part. I'm not aware of any scientific or medical reasons to believe that their platform cannot work, I am however aware of medical reasons to expect challenges to overcome (off-hand, sample volume, collection site), have violent disagreement as to the importance of consumer-intiated testing, etc. Unlike uBeam, there doesn't seem to be fundamental reasons to believe that Theranos' platform could not work and microfluidics being known to the art is supportive. If there are fundamental reasons that the technology cannot work, or if you have good hard sources for what Theranos had working and when, please do share!

> Even for some of the most basic testing they had to fall back on equipment supplied by others and this would have definitely turned up in a real DD, barring magic I don't see how they could have gotten away with it in any realistic setting.

"That's a great observation. It's true we do use conventional equipment for some basic tests and we are up front about that with our strategic partners, and it's simply because it's cheaper to run basic tests on the conventional equipment than on the Edison 1.0. Rather than waste money by insisting all testing run on Edison 1.0, we actually take the savings from running the basic tests on the conventional equipment, and roll that into the development budget for Edison 2.0 which we project will handle 98% of our full panel. Being intimately familiar with conventional equipment has other benefits: it's an important element of our development process to help us to better understand how we can deliver value-based differentiators on Edison 2.0." (or something like that) If they're willing to lie, they can spin a nice yarn and back it up with phony data. It won't fool everyone, but they don't need to fool everyone.

Re: Major Investor Sues Theranos

#229

Post by djf1 »

Shivetya wrote: post #181
djf1 wrote: post #132

Earlier quoted context omitted.

I'm not sure how you came to that conclusion. I just took issue with the suggestion that an unflattering picture somehow supports an article about shady business practices.

I don't see the unflattering aspect here, to we want her perfectly done up with makeup and hair? that too would insinuate a disconnect from common people. in the picture I saw my take away was she was trying to explain a situation and nicely at that. is this all a male perception of a problem they fully do not understand and therefor think they know how its perceived by the opposite sex?

To be clear, I have no opinion about this photo (see my other comments on this thread). * Original commenter highlights their observation that the degree to which a photo is 'flattering' is correlated with the author's desired characterization of the story subject. * Child commenter responds that it is reasonable to attempt to sway the reader's opinion by including an unflattering photo. * I respond that I don't think this is fair.

The question related to gender seems to be somewhat out-of-left-field

Re: Major Investor Sues Theranos

#230

Post by djf1 »

stonemetal wrote: post #187
djf1 wrote: post #132

Earlier quoted context omitted.

I'm not sure how you came to that conclusion. I just took issue with the suggestion that an unflattering picture somehow supports an article about shady business practices.

The exact same argument applies to any photo: If the news is based on facts, then the facts can speak for themselves. A photo does not support the article if the article is not related to how well the subject takes photos.

My claim may have been somewhat unclear. More precisely... a photo that is intended to portray the subject's physical characteristics in a negative light has no place supporting an article about the subject's non-physical characteristics. Photos are great for adding informational content to new stories (e.g. http://cdn.abclocal.go.com/content/wabc/images/cms/1408319_1...).
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