Theranos Low on Cash After Settlement with Walgreens

https://www.wsj.com/articles/theranos-low-on-cash-after-settlement-with-walgreens-1501624665

64 74 9 years ago

"The embattled Silicon Valley firm told investors in June that it had about $54 million left on hand. It was spending about $10 million a month then, but anticipated further reducing its burn rate.

Theranos in June was seeking to raise about $50 million from existing investors. The company declined to comment on whether it had succeeded in doing so, or on its current cash position. It isn’t clear when Theranos will make the payments to Walgreens."

jackmott3• 9 years ago

Why would anyone give them money now?

Overtonwindow3• 9 years ago

Even if the technology was truly promising, and the company had a clear plan forward to develop and profit, I would not give them a cent so long as Holmes is connected to the company. She's far too much of a liability.

protomyth• 9 years ago

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?

jackmott3• 9 years ago

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

frgtpsswrdlame• 9 years ago

Have you looked at their board? It's basically the ultra-elite. How would you even go after James Mattis? It's kind of sad but a brilliant illustration of how much money can protect you. Theranos the company will fail but Theranos the people will be fine, except for the whistleblower that is.

leeoniya• 9 years ago

because the board is stacked with billionaires, former senators and secretaries of state.

too big to jail

cat1992• 9 years ago

dig deep.. see also the board and Ian Gibbons suicide..

The whole thing smacks of an outright fraud to skim funds from obamacare and elsewhere via pharmacy blood testing fees..

Bartweiss2• 9 years ago

Didn't they lie to the board about how/whether the tests worked? Doesn't get upper management off the hook, but I don't actually know how responsible boards are when they're being mislead.

bpodgursky• 9 years ago

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.

lowken10• 9 years ago

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.

georgeecollins• 9 years ago

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.

hsod• 9 years ago

Which crimes?

Bartweiss2• 9 years ago

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? What's happening here?

thinkpad20• 9 years ago

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.

zitterbewegung• 9 years ago

I thought your comment was true 6 months ago and said something similar. I don't think anyone can answer your question until we see the HN post with the title: "Theranos closes" and we read about the postmortem if one will exist.

philipov• 9 years ago

They're a zombie, but having a large cash reserve in one spot is capital, and capital keeps a business running, hunting for brains. Maybe they should reinvent themselves as a hedge fund.

dragonwriter• 9 years ago

In all sincerity: does Theranos have anything left?

As I understand it, Holmes controls an outright majority of the voting rights, so the question is does Holmes have anything left to gain from Theranos operating.

mustacheemperor• 9 years ago

Do they have some existing offering which isn't totally valueless

There's a lot of patents, via Holmes. Someone in the last Theranos thread also pointed out that whatever hardware does exist may have licensing value for other developers. The owners may be planning to part it out.

mathattack• 9 years ago

I suspect that the lawsuit thought process from Walgreen's was, "We can get a huge judgement that will put you into bankruptcy where we fight everyone else for the scraps, or we settle for something more modest and leave you with just enough money to shut down."

Uhhrrr• 9 years ago

Maybe if they have patents which become extremely relevant.

Qub3d3• 9 years ago

Non-paywalled Article (Vanity Fair): https://www.vanityfair.com/news/2017/08/theranos-walgreens-s...

It seems this whole thing was a "build hype now, invent the actual stuff later" policy taken to the extreme. Elizabeth Holmes has done a disservice to the tech community's reputation.

readhn• 9 years ago

"Fake it until you make it" is commonly accepted strategy in the "start up" community..

jonwachob91• 9 years ago

No she hasn't. She just signaled to the world all the VC funds staffed by idiots that think they are the smartest peeps in the room. All the science and life-science funds passed on Theranos b/c they could smell the bullshit from Holmes a mile away. No one in the life-sciences or science industry was harmed by Holmes lies. The only ones hurt were the patients, un-knowing employees, and the inept vc funds.

Qub3d3• 9 years ago

No one in the life-sciences or science industry was harmed by Holmes lies. The only ones hurt were the patients, un-knowing employees, and the inept vc funds.

None of these things fall under the category of Tech Industry, much less its reputation, which is what I was speaking to. In the case of the patients, they were rarely direct customers of Theranos and their actual provider (like Walgreens) has the responsibility of arbitrage. Walgreens, of course, is doing so via suing Theranos.

For the VC funds, risk is a necessary condition to "sit at the table", so if Theranos bankrupts a VC, the blame rests only on the VC itself.

The only group I agree may have been hurt are the lower employees of Theranos. Sadly, that seems to be part of the new American status quo. $company plays fast and loose with the rules, and the grunts (or taxpayers) suffer the consequences.

Overtonwindow3• 9 years ago

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.

paganel• 9 years ago

Years from now, we will be reading amazing business school research

Serious question: Is there a decent future for business schools? Has anyone done a decent ROI calculation on them based on the financial and business results of the past 15/20 years? Are they currently on an upward trend? Downward? Stagnant?

The reason I'm asking is that from half a globe away (Eastern Europe) the MBA and business school hype seems to have died a little compared to 10 years ago, as in I don't get to see "this guy/lady graduated from Wharton School" all that often when reading business/financial profiles.

Overtonwindow3• 9 years ago

That's a fair question and I don't know the answer to it. I study and work in public policy. Ergo I imagine that the study and analysis of business would come from b-schools. However, to try and answer your question, I've seen it mentioned here and in the news that the primary value of going to a business school is not the education, but the contacts you make.

greenburger• 9 years ago

The Economist has done this a few times in recent years:

https://www.economist.com/news/business/21601884-payback-tim... http://www.economist.com/whichmba/think-twice

sjg007• 9 years ago

An MBA from a top school is worth the money and what you make of it.

markdavis33• 9 years ago

The Financial Times did an interesting story about this recently: https://www.ft.com/content/36942668-8ca0-11e6-8cb7-e7ada1d12...

chongli3• 9 years ago

Is there a decent future for business schools?

Yes, as long as you understand their purpose. They exist as a form of class signalling. [0] Many of the older forms of nepotism/cronyism have been made illegal. Racial and IQ discrimination are also illegal. Therefore, business schools and law schools fill the gap. They exist to tell an employer that the applicant is either a member of their class or an ally.

[0] http://lesswrong.com/lw/did/what_is_signaling_really/

cat1992• 9 years ago

... but dig a bit deeper and it seems like an outright fraud, and the ability to hype is not surprising considering the backroom players..

TeMPOraL• 9 years ago

Related question: how is uBeam still alive?

bllguo• 9 years 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.

cr0sh• 9 years ago

Also the fact that she doesn't like getting stuck with a needle.

Now, nobody -likes- getting stuck with a needle, but it really isn't as terrible as many make it out to be (unless they miss the vein for an IV - over and over - but that's just up to incompetence or being unlucky).

Certainly not so bad as to perpetrate something of this magnitude.

That said, I tend to wonder if it is possible at all (that is, within the realm of what our technology currently allows for, or what can be done with potential near-future technology) to be able to do the kind of testing at all?

Basically - can you take a drop of blood, and analyse it in such a manner to do all the tests touted by Theranos (even if only in a lab setting and "by hand")? I know for some things it is possible (we all know of glucose testing for those with diabetes, and I've seen something similar for testing of LDL/HDL levels) - so can that be extrapolated to other things - and all with one drop?

I don't know - but I'd love to know. Personally, I don't mind having blood drawn for a test - what I don't like is having to go to a special center to have it done, or to have it done as a separate appointment or whatnot. It would be much more efficient if the doctor or nurse could just poke my finger, get a drop, and stick it in a hand-held machine or something and get an instant reading.

But so far, that seems like it's still in the realm of science fiction than possible science fact.

k1lly• 9 years ago

That pretty much sums it up: https://medium.com/multiple-personalities-order/how-to-be-th...

Qub3d3• 9 years ago

These sentiments are essentially a rough paraphrasing of One Up on Wall Street (published 17 years ago) [0] with crass language added "for the fucking effect!"

[0] https://www.goodreads.com/book/show/762462.One_Up_On_Wall_St...

kolbe• 9 years ago

The fact that this company even still exists shows what kind of distorted and unsustainable market we have right now.

WillyOnWheels• 9 years ago

It's interesting that at this point any institutional investor still has funds parked in Theranos. They must really think they know something that everyone else does not know.

pcsanwald• 9 years ago

it can mean a variety of things, including that they don't want to realize a loss on the current valuation.

Theranos Low on Cash After Settlement with Walgreens

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