
Theranos might be on life support - artsandsci
https://techcrunch.com/2017/02/17/theranos-might-be-on-life-support/
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ChuckMcM
If they truly have only $200M cash on hand, no revenue, 220 employees, and
nothing set aside for liabilities, then they aren't on life support they are
already dead.

Leases on their existing buildings, salary and benefits for 220, capital costs
for their 'mini lab', and legal fees to defend their current lawsuit load? The
Walgreen's suit alone is asking $140M.

I can't imagine any bank, VC, or even hedge fund going near this. Theranos has
to successfully defend all of their lawsuits, execute perfectly on their
minilab, and develop enough credibility to actually bring their ideas to
market. Any one of those things goes wrong and blam! all that money goes up in
smoke.

What I think doesn't matter of course, but I think they would be better off
rolling it up, selling off what they can, payout out what they can to their
creditors and leaving this chapter behind them. As someone who watched Webvan
and Pets.com crash, this one is up there.

~~~
openmosix
The honest question is - how are they able to retain the 220 employees? I'd
assume are very talented scientists, engineers, etc. Given this story has been
going on for more than a year (or two), how do they keep people around?

~~~
natosaichek
I know someone who works there and despite his high level of talent and
unusual skillset is having problems finding another position because of the
black mark the "Theranos" brand is having on his resume. He's been looking for
more than a year. :-/

~~~
freddyc
Unfortunately, he's probably not helping his cause by hanging around at this
point. I'm sure he has his reasons - family, mortgage etc - but a lot of
recruiters likely treat those who remained despite the damning revelations
very differently to those who jumped as soon as the writing was on the wall.

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nullnilvoid
Why is Elizabeth Holmes not in jail? She lied blatantly about their blood-
testing medical equipments which can potentially kill people with wrong
testing results, and delayed treatments. One of her employees committed
suicide, partially because of the pressure she put on him. Why is she not in
jail?

~~~
smallgovt
Genuinely curious. What law do you think she personally broke?

Lying to the media/public, though largely unethical, doesn't strike me as
being illegal.

Piling back-breaking stress on an employee also doesn't strike me as illegal.

~~~
SolarNet
> She lied blatantly about their blood-testing medical equipments which can
> potentially kill people with wrong testing results,

I think is the only one which is actually crime and which she has already been
punished for.

~~~
maverick_iceman
Exactly how was she punished? Are you talking about her ban from running a
blood testing lab? I don't consider that a punishment, more like a rap in the
knuckles. Consider that real people were hurt by her/Theranos's actions,
people who were misdiagnosed and as a result given wrong medications.

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eitally
"Might" be? They've been on life support since 2015, they just didn't want to
believe it (or anyone else to realize it). As the lawsuits have piled up, the
sanctions have mounted and partners (Walgreens) have pulled out, there hasn't
been a single bright spot in the past two years.

Just browse the first few pages of this search:
[https://www.google.com/search?q=theranos+lawsuit](https://www.google.com/search?q=theranos+lawsuit)

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cft
"Just 200m"! These guys and the VC s are operating in a different realm from
any bootstrapped company that don't aim to "exit". This makes me think that
sadly bootstrapping high tech in the silicon valley is nearly impossible in
this century.

~~~
gwern
I wondered why Holmes had never been forced out by investors or banks as a
precondition of getting more support, but this explains why she's still there
- they _can 't_, because she has majority share power and Theranos still has
oceans of cash and no need to go begging to anyone. There's simply no way to
stop her or force her out aside from long-shot minority shareholder lawsuits
(although I think there's at least one of those ongoing), and it'll take years
or decades for all the lawsuits to finish appeals and to spend the cash down
with a skeleton crew.

Indeed, given how her reputation is radioactive, why would she _ever_ leave
Theranos anytime soon? No one is going to hire her for anything anywhere else;
she can continue drawing a CEO salary/benefits and keep playing CEO and a
sense of self-worth; she gets Theranos to pay her legal bills (which may not
be trivial by the end); and can mess around with an enormous fortune of $200m
however she likes; and who knows, may even succeed in a pivot to something
else - hope springs eternal.

(I wonder how much cash Magic Leap has left.)

~~~
spitfire
> No one is going to hire her for anything anywhere else;

Yes they will. She'll pop back up in a few years. Maybe in a hedge fund, VC/PE
firm or something, but she will. For an example of this see Kaavya
Viswanathan.

She's in the club now and she's towing the line, it's hard to get kicked out
of the club when you're towing the line.

~~~
ghaff
Sadly you are probably right as I do think her actions at least border on the
criminal. But there are plenty of bolt holes largely out of the public eye for
well-connected people.

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juandazapata
I'm sorry for the employees that lost their jobs because of the shady
practices from management. Other than that, I hope they close doors soon.
Putting people at risk for the sake of making a few bucks has no
justification.

~~~
hkmurakami
I think one positive caveat from all the very public bad press about the
company is that it's pretty reasonable to think that employees had nothing to
do with the demise of the company and being let go / fired can easily be seen
as the company's fault rather than the employee's.

I hope that works in the favor of the people being let go.

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pbreit
I suspect $200 million could fund a great deal of life support.

~~~
elsewhen
under normal circumstances, absolutely, but considering the number of lawsuits
they are battling, that war-chest could dwindle rapidly.

~~~
nikcub
Lawsuits that go to trial are slow, tho - especially those in Delaware.
They're likely looking at years++

What I'm curious about is since the value of civil claims against Theranos is
now greater than their cash balance what chance do plantiffs have on an asset
freeze or forcing administration

I initially thought the lawsuits were about individual parties suing to gain
seniority on debt structuring in bankruptcy but it makes more sense that
enough parties got together and sued to force bankruptcy so that 20-30c in the
dollar could be obtained as opposed to 0

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aaronbrethorst
I'll be interested to see where Holmes ends up after all this. My bet is that
she joins a hedge fund, VC firm, or PE firm after the dust settles. Only
question to me is which ones wouldn't find the Theranos backstory to be a
disqualification.

~~~
Kenji
Oh, she'll be fine. For CEOs it's "fail big, gamble bigger". Only the little
people have to carry the burden of responsibility for their work and track
record.

~~~
aaronbrethorst
Oh, I'm not worried about her well-being. I'm mostly curious to see which
PE/VC/Hedge firms genuinely DGAF about public perception.

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ultrahate
"""Might"""

Give me a break, Theranos is the biggest disgraceful excuse of a company that
I've ever even heard of, and I've been reading this dumb board for 5+ years
now.

That people aren't 100% dismissive of Theranos is absolutely mind-boggling.
The level of corruption, incompetence, and just the poor organization of it
all.

Other commenters have also noted that if they aren't doing well on cash,
they're pretty much dead anyways.

I want Theranos to crash and burn as loud as humanly possible, so that people
might pay attention for two seconds and look at what happens when you refuse
to give a shit about the ethics and competence behind your business/startup.

Now, I suspect a lot of Theranos employees at this point are probably just
waiting on that last check, but there's probably some poor souls on that list
who really wanted to achieve something, and now they're more or less fucked
from having to be associated with Theranos. It will be harder for them to find
a new job with that black mark, I'm sure poor severance will make it hard for
them to bootstrap their own ideas. They are backed into a corner, because of
Theranos.

Life in an unethical business can be nasty, brutish and short.

~~~
harigov
Just out of curiosity, did you reach to this conclusion based on what you read
in the news about Theranos or do you have some other extra information? I have
no relation whatsoever to Theranos and I am genuinely wondering how someone
can have such a strong opinion on a company that they read about in news,
which we all know never tells the full story.

~~~
cyberferret
I am guessing that the strong feelings may be to do with the outcomes of the
company's bungling. After all, we are talking about people lives being in the
balance here.

The constant sugar coating, avoiding, or plastering over of defective
methodologies and processes can elicit these sorts of feelings - especially if
the person suspects, or knows of issues that should be brought to light.

Its different say, in the case of a soda manufacturer changing the recipe for
their best selling beverage. The faux outrage there is probably an
overreaction. But if it is a car/aircraft manufacturer that knowingly builds
vehicles with a known defect that can cost human lives? Well, then, I think
the outrage is justified. I think Theranos falls into the second category.

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johansch
So who are the main investors? Seems like a prime opportunity to name and
shame.

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revelation
Only two hundred thousand thousand dollars? Yes you can't possibly run a
business on that.

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coldtea
Theranos was still alive?

