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Regulators Propose Banning Theranos Founder from Blood Testing

wsj.com

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Re: Regulators Propose Banning Theranos Founder from Blood Testing

#41

Post by theseatoms »

rzt wrote: post #40
dcgudeman wrote: post #9

The more I read about theranos the more apparent it is that there is something fundamentally wrong with it's core goals, leadership and technology. One easily identifiable red flag is the composition of its board. It's nearly all ex-military and government officials not veteran entrepreneurs and technologists. Just to name a few: George Shultz (former Secretary of State), Sam Nunn and Bill Frist (former U.S. Senators…

In discussion on other HN threads, some commenters suggested that the board was composed that way to grease the wheels of a DoD acquisition of the company's "tech". As OP put it [ https://news.ycombinator.com/item?id=11403165 ]: John the more I think about Theranos the more I think this “mess” is actually deliberate. Looking at the history of Theranos and the composition of the board it appears Theranos was designed…

Let's give the powers that be a hearty welcome to the Age of Transparency. :)

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#42

Post by benologist »

dcgudeman wrote: post #24
danem wrote: post #18

Earlier quoted context omitted.

What kind of questions exactly? It seems to me that having such powerful, influential, former members of government on your board would be highly valuable in navigating the difficult regulatory environment companies in this industry face.

Why do you have Henry Kissinger on your board and not a veteran medical device or medical test industry expert. Henry Kissinger might have tons of foreign policy experience but this is a completely different field.

Not having such expertise on their board doesn't mean they don't have that expertise within their company.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#43

Post by numair »

theseatoms wrote: post #21
dcgudeman wrote: post #9

The more I read about theranos the more apparent it is that there is something fundamentally wrong with it's core goals, leadership and technology. One easily identifiable red flag is the composition of its board. It's nearly all ex-military and government officials not veteran entrepreneurs and technologists. Just to name a few: George Shultz (former Secretary of State), Sam Nunn and Bill Frist (former U.S. Senators…

Bill Frist is a medical doctor and has focused on healthcare policy throughout his career, for whatever that's worth.

Umm, the good doctor's wealth comes from HCA, a chain of for-profit hospitals that once held the record for the largest fraud settlement in US history. Frist clearly has excellent PR, because very few people ever mention this.

http://www.forbes.com/2000/12/15/1215disaster.html

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#44

Post by txttran »

chimeracoder wrote: post #37
jonknee wrote: post #2

It's just a matter of time before huge writedowns in the valuation happen. And Elizabeth Holmes won't be described as a billionaire for much longer (which unless I have missed something is almost all on paper). Without a drastic plot twist it appears this company is little more than vaporware. At least the investors that will lose their money are people who should have all known better (and can afford the loss!), bac…

> And Elizabeth Holmes won't be described as a billionaire for much longer (which unless I have missed something is almost all on paper) Almost anytime a startup gets to a valuation that high, the founders have had an opportunity to take some money off the table. VCs like this, because it keeps the founders' incentives aligned with the investors' (they are more likely to take risks and swing for the fences if they do…

It says in the article that she has >50% equity.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#45

Post by entee »

rzt wrote: post #40
dcgudeman wrote: post #9

The more I read about theranos the more apparent it is that there is something fundamentally wrong with it's core goals, leadership and technology. One easily identifiable red flag is the composition of its board. It's nearly all ex-military and government officials not veteran entrepreneurs and technologists. Just to name a few: George Shultz (former Secretary of State), Sam Nunn and Bill Frist (former U.S. Senators…

In discussion on other HN threads, some commenters suggested that the board was composed that way to grease the wheels of a DoD acquisition of the company's "tech". As OP put it [ https://news.ycombinator.com/item?id=11403165 ]: John the more I think about Theranos the more I think this “mess” is actually deliberate. Looking at the history of Theranos and the composition of the board it appears Theranos was designed…

I'm a little confused, does the military acquire companies wholesale? I've never heard of that happening, that's not to say it can't but what are some examples of this kind of scheme?

Instead was the plan to milk the military for a long time on R&D expenses and just pocket the cash as one goes along? If so how does that work for the VC-backed structure of the company?

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#47

Post by electic »

I wonder how much Quest and LabCorp have lobbied to get Theranos under the microscope. Almost all labs have findings including FDA labs that need be to corrected. I just find it odd that WSJ seems to get access to government documents, internal information, and competitor benchmarks over and over again. Theranos faults aside, something does not smell right here.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#48

Post by vonmoltke »

rzt wrote: post #40
dcgudeman wrote: post #9

The more I read about theranos the more apparent it is that there is something fundamentally wrong with it's core goals, leadership and technology. One easily identifiable red flag is the composition of its board. It's nearly all ex-military and government officials not veteran entrepreneurs and technologists. Just to name a few: George Shultz (former Secretary of State), Sam Nunn and Bill Frist (former U.S. Senators…

In discussion on other HN threads, some commenters suggested that the board was composed that way to grease the wheels of a DoD acquisition of the company's "tech". As OP put it [ https://news.ycombinator.com/item?id=11403165 ]: John the more I think about Theranos the more I think this “mess” is actually deliberate. Looking at the history of Theranos and the composition of the board it appears Theranos was designed…

I think you are cheapening the meaning of "fraud" if you think there is hundreds of billions worth of it going on in the government.

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#49

Post by rzt »

entee wrote: post #45
rzt wrote: post #40

Earlier quoted context omitted.

In discussion on other HN threads, some commenters suggested that the board was composed that way to grease the wheels of a DoD acquisition of the company's "tech". As OP put it [ https://news.ycombinator.com/item?id=11403165 ]: John the more I think about Theranos the more I think this “mess” is actually deliberate. Looking at the history of Theranos and the composition of the board it appears Theranos was designed…

I'm a little confused, does the military acquire companies wholesale? I've never heard of that happening, that's not to say it can't but what are some examples of this kind of scheme? Instead was the plan to milk the military for a long time on R&D expenses and just pocket the cash as one goes along? If so how does that work for the VC-backed structure of the company?

I have no expertise in any of this, but I was assuming it would be something along the lines of an IDIQ (indefinite delivery, indefinite quantity) contract vehicle: https://en.wikipedia.org/wiki/IDIQ

Re: Regulators Propose Banning Theranos Founder from Blood Testing

#50

Post by Animats »

chimeracoder wrote: post #37
jonknee wrote: post #2

It's just a matter of time before huge writedowns in the valuation happen. And Elizabeth Holmes won't be described as a billionaire for much longer (which unless I have missed something is almost all on paper). Without a drastic plot twist it appears this company is little more than vaporware. At least the investors that will lose their money are people who should have all known better (and can afford the loss!), bac…

> And Elizabeth Holmes won't be described as a billionaire for much longer (which unless I have missed something is almost all on paper) Almost anytime a startup gets to a valuation that high, the founders have had an opportunity to take some money off the table. VCs like this, because it keeps the founders' incentives aligned with the investors' (they are more likely to take risks and swing for the fences if they do…

Expect investor lawsuits against her personally. This goes way beyond business failure. It's unusual for a regulatory agency to bar the CEO from an industry, unless they're a crook.
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