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Theranos Low on Cash After Settlement with Walgreens

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Re: Theranos Low on Cash After Settlement with Walgreens

#41

Post by jzebedee »

unknown_apostle wrote: post #40
rgbrenner wrote: post #34

Earlier quoted context omitted.

No one would put money into a hedge fund run by holmes. Would you trust her with your money? She stinks of fraud already. If she told me the fund was doing great, I would get suspicious that she was turning into the next bernie madoff.

You would think so, but: https://en.wikipedia.org/wiki/John_Meriwether "A year after LTCM's collapse, in 1999, Meriwether founded JWM Partners LLC. (...) Meriwether opened his third hedge fund venture, named JM Advisors Management, also based in Greenwich, Connecticut, in 2010." Meriwether blows up and is not a fraud. But then there's this guy: https://www.wsj.com/articles/jon-corzine-considers-launching... Though in…

I don't think equating LTCM with fraud is exactly right. They used an incredibly risky strategy and had their leverage blow up in a black swan event. A failure, but not fraud.

Re: Theranos Low on Cash After Settlement with Walgreens

#42

Post by bpodgursky »

jackmott wrote: post #4
protomyth wrote: post #3

A company has not only totally failed in the market but employed deception which lead to a lawsuit, my question is how do they have any money left at all? Isn't this such a miss that whatever was left should just be returned to investors and the company close down. Does anyone have a scenario where this company becomes viable?

Indeed, why isn't the entire board, and upper management in jail?

Why would the board be in jail? They are the ones who invested and may be losing money. Who did they defraud?

Prison isn't a random card you can play to threaten people who you don't like, unless you want to go back to the USSR.

Re: Theranos Low on Cash After Settlement with Walgreens

#43

Post by bllguo »

Overtonwindow wrote: post #7

Theranos seems to be an example of supreme hubris. Years from now, we will be reading amazing business school research into how a company, seemingly built on the ultimate vaporware, run by a woman who saw herself as the next Steve Jobs, collapsed due to the CEO's hubris. I think if it weren't for Holmes controlling interest she would have been let go a long time ago.

Hubris? Yes, among other things, such as deception and fraud. I personally hope that besides that research, I'll also be reading reports on Holmes and other Theranos management thrown in jail.

Re: Theranos Low on Cash After Settlement with Walgreens

#44

Post by CalChris »

georgeecollins wrote: post #32
lowken10 wrote: post #21

Earlier quoted context omitted.

My question is why isn't Elizabeth Holmes in prison? She is a disgrace. And I was a huge fan of hers (I thought she would be a good role model for my daughter) before her crimes came to light.

In case you were in a coma 2008-2009, the US justice system likes to settle with corporations, but almost never actually tries to convict white collar criminals. Here is a whole book subtitled "Why the justice department fails to prosecute executives." https://www.amazon.com/dp/B06XBZFQR2/ref=dp-kindle-redirect?... It is very well reviewed.

Well, the book didn't get out of the first sentence for me.

> each a realm unto itself, run by a US Attorney who is almost untouchable by headquarters in faraway DC.

In fact, each US Attorney can be fired at will by the President. At will and not for cause. The Fed Chair can be fired but only for cause.

This leads to US Attorneys living in a very political world. They are politically appointed (Chris Christie), Senatorially confirmed (Jeff Sessions USAG) and politically removed (George W Bush). So defendants who are politically connected are not going to get prosecuted and that's that.

Re: Theranos Low on Cash After Settlement with Walgreens

#45

Post by seanp2k2 »

thinkpad20 wrote: post #27
Bartweiss wrote: post #24

Earlier quoted context omitted.

In all sincerity: does Theranos have anything left? This isn't 23andMe where a viable product got caught up in legal fights over reporting. As I understood it, the fraudulent component here was "everything at all worthwhile about the product". Are they just a shell at this point, trying to use the team and leftover money as a basis for a new project? Do they have some existing offering which isn't totally valueless?…

The only thing that comes to mind is the sunk costs fallacy. Although it's hard to imagine Theranos ever becoming a success (and certainly, I won't be rooting for it), it might be harder for those who poured millions into the company to let go. That's my guess anyway.

Why stop operating when you can continue until bankruptcy and beyond? Serious question...if there's no reputation left to lose and everyone is still getting paid, what incentive do they have to stop?

Re: Theranos Low on Cash After Settlement with Walgreens

#46

Post by rgbrenner »

unknown_apostle wrote: post #40
rgbrenner wrote: post #34

Earlier quoted context omitted.

No one would put money into a hedge fund run by holmes. Would you trust her with your money? She stinks of fraud already. If she told me the fund was doing great, I would get suspicious that she was turning into the next bernie madoff.

You would think so, but: https://en.wikipedia.org/wiki/John_Meriwether "A year after LTCM's collapse, in 1999, Meriwether founded JWM Partners LLC. (...) Meriwether opened his third hedge fund venture, named JM Advisors Management, also based in Greenwich, Connecticut, in 2010." Meriwether blows up and is not a fraud. But then there's this guy: https://www.wsj.com/articles/jon-corzine-considers-launching... Though in…

"Though in all fairness I don't know whether he pulled that one off."

He didn't. In fact, that was his 2nd attempt at raising a fund.. he tried in 2012 right after mf. And he's currently working on his third attempt to raise a fund. http://www.zerohedge.com/news/2017-05-18/corzine-tries-launc...

If anything, that's a pretty good example of my point.. no one wants to give their money to a fraud.

Re: Theranos Low on Cash After Settlement with Walgreens

#47

Post by btilly »

jzebedee wrote: post #41
unknown_apostle wrote: post #40

Earlier quoted context omitted.

You would think so, but: https://en.wikipedia.org/wiki/John_Meriwether "A year after LTCM's collapse, in 1999, Meriwether founded JWM Partners LLC. (...) Meriwether opened his third hedge fund venture, named JM Advisors Management, also based in Greenwich, Connecticut, in 2010." Meriwether blows up and is not a fraud. But then there's this guy: https://www.wsj.com/articles/jon-corzine-considers-launching... Though in…

I don't think equating LTCM with fraud is exactly right. They used an incredibly risky strategy and had their leverage blow up in a black swan event. A failure, but not fraud.

A black swan event caused by the phenomena that previously uncorrelated financial indicators temporarily become correlated under stress.

A few months after they blew up, their portfolio was profitable again.

Re: Theranos Low on Cash After Settlement with Walgreens

#48

Post by unknown_apostle »

jzebedee wrote: post #41
unknown_apostle wrote: post #40

Earlier quoted context omitted.

You would think so, but: https://en.wikipedia.org/wiki/John_Meriwether "A year after LTCM's collapse, in 1999, Meriwether founded JWM Partners LLC. (...) Meriwether opened his third hedge fund venture, named JM Advisors Management, also based in Greenwich, Connecticut, in 2010." Meriwether blows up and is not a fraud. But then there's this guy: https://www.wsj.com/articles/jon-corzine-considers-launching... Though in…

I don't think equating LTCM with fraud is exactly right. They used an incredibly risky strategy and had their leverage blow up in a black swan event. A failure, but not fraud.

No you're right, it's fundamentally wrong to compare Meriwether with Corzine. But my kneejerk response was to the "entrust your money".

Re: Theranos Low on Cash After Settlement with Walgreens

#49

Post by awinder »

seanp2k2 wrote: post #45
thinkpad20 wrote: post #27

Earlier quoted context omitted.

The only thing that comes to mind is the sunk costs fallacy. Although it's hard to imagine Theranos ever becoming a success (and certainly, I won't be rooting for it), it might be harder for those who poured millions into the company to let go. That's my guess anyway.

Why stop operating when you can continue until bankruptcy and beyond? Serious question...if there's no reputation left to lose and everyone is still getting paid, what incentive do they have to stop?

If you're an investor, do you want to get some pennies back on the dollar, or do you want to get 0 pennies back on the dollar? If they liquidate they can take that cash and pay out something, at least to some class of investors.

Re: Theranos Low on Cash After Settlement with Walgreens

#50

Post by 24gttghh »

CalChris wrote: post #44
georgeecollins wrote: post #32

Earlier quoted context omitted.

In case you were in a coma 2008-2009, the US justice system likes to settle with corporations, but almost never actually tries to convict white collar criminals. Here is a whole book subtitled "Why the justice department fails to prosecute executives." https://www.amazon.com/dp/B06XBZFQR2/ref=dp-kindle-redirect?... It is very well reviewed.

Well, the book didn't get out of the first sentence for me. > each a realm unto itself, run by a US Attorney who is almost untouchable by headquarters in faraway DC. In fact, each US Attorney can be fired at will by the President. At will and not for cause. The Fed Chair can be fired but only for cause. This leads to US Attorneys living in a very political world. They are politically appointed (Chris Christie), Senat…

When was GWB a US Attorney? Or are you referring to this[0]?

[0]https://en.wikipedia.org/wiki/Dismissal_of_U.S._attorneys_co...

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