Theranos - fraud

[Pekelo]

I am salivating! A movie is coming from Adam McKay of Big Short fame about Theranos called Bad Blood. Jennifer Lawrance is playing our famed heroine:

http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrence-theranos-elizabeth-holmes

“They basically tell the story of how Elizabeth Holmes created these fraudulent blood-testing machines, raised $9 billion through venture capitalists in Silicon Valley, and refuses to admit they don’t work even when it is obvious the testing is inaccurate,” says a studio source familiar with how the project was pitched. “They employ a big-time litigator and threaten to sue anyone who challenges her.”

 

[RedDuke]

I am salivating! A movie is coming from Adam McKay of Big Short fame about Theranos called Bad Blood. Jennifer Lawrance is playing our famed heroine:

http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrence-theranos-elizabeth-holmes

“They basically tell the story of how Elizabeth Holmes created these fraudulent blood-testing machines, raised $9 billion through venture capitalists in Silicon Valley, and refuses to admit they don’t work even when it is obvious the testing is inaccurate,” says a studio source familiar with how the project was pitched. “They employ a big-time litigator and threaten to sue anyone who challenges her.”

Should be an interesting movie to watch.

 

[OddTrader]

I am salivating! A movie is coming from Adam McKay of Big Short fame about Theranos called Bad Blood. Jennifer Lawrance is playing our famed heroine:

http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrence-theranos-elizabeth-holmes

“They basically tell the story of how Elizabeth Holmes created these fraudulent blood-testing machines, raised $9 billion through venture capitalists in Silicon Valley, and refuses to admit they don’t work even when it is obvious the testing is inaccurate,” says a studio source familiar with how the project was pitched. “They employ a big-time litigator and threaten to sue anyone who challenges her.”

My view is this whole project is just like most other new ventures. However, the investment on hardware could be much much more expensive than simply IT development.

How can people, including venture capitalists, sue any new ventures? Whether IPO or not. To be reasonable.

Actually the court/judge wanted to stop her engaged in the same business for a few years would be not totally fair, imo.

Obviously last time the VCs were definitely too lazy to do effective DD. What kind of ongoing QC/QA, internal and external, were appointed for verifying the machine? On development sample, prototype, pilot production, etc.

The VCs perhaps should sue for their own negligence!

Most medical/drug related projects could spend many many years of development, and field trails.

It's a free market.

The future investors/VCs, if any, should carry out their further DD, instead.

I think the improved idea for developing a client-based machine should be still a viable one.

Perhaps I don't really understand the full picture, based on very limited information I read today.

Just 10 cents.

 

[Pekelo]

How can people, including venture capitalists, sue any new ventures? Whether IPO or not. To be reasonable.

Because there are such things like outright lying and not following proper procedures. Sure new start ups are dangerous investments, but they are based on honesty at least.

Let's say my name is Charles Ponzi and I have an idea of Italian stamp arbitrage. You give me VC money to back the idea, but if I don't even buy one single Italian stamp (outright lie) you could rightfully sue me for breaching promises/contract. Now if the US post office require me to sell the stamps through them and I don't do that (not following proper procedures) you could also sue me.

So you are wrong...They weren't suing because they lost money, they were suing because they have been lied to and misled.... aka FRAUD.

 

[OddTrader]

Because there are such things like outright lying and not following proper procedures. Sure new start ups are dangerous investments, but they are based on honesty at least.

Let's say my name is Charles Ponzi and I have an idea of Italian stamp arbitrage. You give me VC money to back the idea, but if I don't even buy one single Italian stamp (outright lie) you could rightfully sue me for breaching promises/contract. Now if the US post office require me to sell the stamps through them and I don't do that (not following proper procedures) you could also sue me.

So you are wrong...They weren't suing because they lost money, they were suing because they have been lied to and misled....

You may not carefully read my last post in full.

VCs would not release all the money in one lot. They need to check progress and then release part of their money according to milestones.

Not all inventions and patents are practically usable, successful and finally making money.

The most valuable investment is the knowledge and experience of the inventors.

The VCs might have to secure a second round of finance, possibly more external fresh VCs who have got more experience in this type of ventures/projects.

The board members, who do not have enough relevant knowledge and experience, appointed solely by the inventor is a poor decision.

The board this time should be also responsible for the fail this round and should be replaced by others who are more qualified, imo.

My 10 cents again.

 

[Pekelo]

VCs would not release all the money in one lot. They need to check progress and then release part of their money according to milestones.

We don't know the details, but if you are LIED TO, then nothing you can do about it and you will release the money and the LIARS will pass the milestones. There were at least 2 founding rounds, and obviously a second batch of VCs lined up for the shares and Theranos didn't have a problem raising 600 mill in 2015. Based on cheating with the test results...

Obviously picking board members based on their connections instead of expertise doesn't help either...

 

[OddTrader]

We don't know the details, but if you are LIED TO, then nothing you can do about it and you will release the money and the LIARS will pass the milestones. There were at least 2 founding rounds, and obviously a second batch of VCs lined up for the shares and Theranos didn't have a problem raising 600 mill in 2015. Based on cheating with the test results...

Obviously picking board members based on their connections instead of expertise doesn't help either...

https://en.wikipedia.org/wiki/Theranos
http://www.cnbc.com/2017/04/05/foun...eportedly-owes-theranos-about-25-million.html

You're right that lack of details, also many unclear questions too.

 

[beefcaketrade]

Personally, I smelled something fishy a long time ago when I read testimonies that they were drawing large samples of blood to do tests. That right there completely defeats the entire premise of their technology of using small pinprick blood samples. Immediately your spidey senses should tingle.

It was like that moment when naval helicopters monitoring the situation picked up radioactive isotopes up in the clouds outside of fukushima. Instantly you knew there was a reactor breach and meltdown, in spite of the BSing the Japanese gov and TEPCO peddled for a few months.

 

[ironchef]

They probably made necessary and sufficient disclosures to avoid prosecution and fraud charges. The fact that in quantities, the blood test machines were not as accurate as when launched (and verification data) is not fraud, happened all the time to start up ventures in all types of businesses. Partners not reading the fine prints or examining the data carefully were not their fault.

I can remember a start up called Thermolase, a publicly traded company, a few years back. It was launched with a laser hair removal product, hyped up to market cap of $1B (a big deal 20 years ago). Product didn't work and the company went under. A lot of investors loss $ but there were no charges filed.

 

[beefcaketrade]

I am salivating! A movie is coming from Adam McKay of Big Short fame about Theranos called Bad Blood. Jennifer Lawrance is playing our famed heroine:

http://www.vanityfair.com/hollywood/2016/06/jennifer-lawrence-theranos-elizabeth-holmes

“They basically tell the story of how Elizabeth Holmes created these fraudulent blood-testing machines, raised $9 billion through venture capitalists in Silicon Valley, and refuses to admit they don’t work even when it is obvious the testing is inaccurate,” says a studio source familiar with how the project was pitched. “They employ a big-time litigator and threaten to sue anyone who challenges her.”

Can't wait for this movie, if it gets made at all.

But I have a feeling it will be spin on the positive for the founder and the company. This is hollywood we're talking about. No way they will not have a feminist girl power spin to it. The antagonists might be the journalist men from the east coast (Wall Street types) who keep probing and probing into this messiah of a company and darling of the west cost (Silicon Valley baby) and releasing negative press spin to try to create doubt and damage a promising technology startup.