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Forbes Just Cut Its Estimate of Theranos CEO Elizabeth Holmes's Net Worth From $4.5 Billion To Zero (qz.com)
It wasn't long agon when Elizabeth Holmes, the founder and CEO of Theranos, was regarded as one of the U.S.'s most successful female entrepreneurs with Forbes estimating her net work to be $4.5 billion. Thanks to all the evidence that Theranos' technology is largely a gimmick and false advertising, the publication has revised that figure to essentially zero, reports Quartz. From the report: Last year, Forbes pegged its value at $9 billion, based on the sale of stakes to investors. Since that lofty estimate, Theranos has been battered by bad news (paywalled; alternate source), starting with reports in the Wall Street Journal in October that its tests were inaccurate. That triggered an inquiry from the federal Centers for Medicare and Medicaid Services, which proposed banning Holmes from the industry. Forbes went back to its slide rule and, after talking to venture capitalists and industry experts, recalculated Theranos' value at $900 million, based on its intellectual property and money it has already raised. "At such a low valuation, Holmes' stake is essentially worth nothing," Matt Herper writes. That's because Theranos' other investors own preferred shares, and since Holmes owns common shares, they would get paid first if the company were forced to liquidate.
The $900M is the value of the COMPANY, not her net worth. They figure the only way to get value out of the company is to liquidate it, and she would get almost none of the proceeds. So HER net worth is $0.
What she owns are shared, and if her shares are not preferred, when the company declared bankruptcy what will happen is that all its assets will be liquidated and preferred investors paid first. Nothing will be left for her because of that. Therefore, her net worth is zero.
The argument is that she owns ordinary shares, and while those shares might be kinda sorta worth $100-200M on paper (I can't be bothered to do the calculations...) the reality is she can't sell them (the price would tank if she tried) and if the company goes bankrupt, and Forbes thinks it's very, very, likely it will, then as an ordinary shareholder she'll be last in line to get paid. Bondholders, preferred stock holders, and even the credit card company are ahead of ordinary shareholders when it comes to being paid back after a company is liquidated.
You are not alone. This is not normal. None of this is normal.
$900M isn't Holmes' net worth; it's the entire net worth of Theranos as a company. Last line of the summary is a bit confusing but what it's saying is that if the company were forced to liquidate all current assets, Holmes would be among the last to get paid. Other investors in the company with preferred shares would be paid first. By the time it gets to the point where Holmes could legally be paid from the liquidation, it's more than likely there'd be nothing left for her to get.
It's an interesting question: how come so many of these "successful females in IT" are just charlatans? For another example the ex-CEO of Reddit, married to an extremely unscrupulous gay man.
Perhaps they view technology as a "social construct"? That's quickly turning into a dog-whistle word for a con-man. Or con-woman, whatever.
Mod me down if you wish but I gotta say...All slashdotters seem to do these days is hate, she's actually trying to do something to help the world.
For example, here's an image of her developing an estimation mechanism for calculating the girth of penises, a sorely needed tool that she had a hand in developing for the porn industry:
https://www.epo.org/learning-events/european-inventor/finalists/2015/holmes/HolmesGallery1.jpg?lenya.module=svg&height=371&width=556
So the real question is how many slashdotters can make a claim to inventing something as innovative as that? Not many I suspect.
Replaced by 3rd world commodity labor. Soon to be replaced by robots.
"Prediction: within 10 years, Windows will be a Linux distribution." Me, 7-6-2016
The original article was essentially bullshit, using people who worked at Theranos for 2 weeks 5 years ago as "internal sources", and debunking claims that Theranos never made. What they did was like posting a story saying that the Linux kernel doesn't "truly" prevent computers from being infected by viruses (a claim nobody ever made) and that the GNU didn't it grant it a GPLv3 license.
I don't know if this total incompetence or if there's a hidden agenda, or maybe it is in fact a case of blatant sexism, but the coverage of Theranos by the Wall Street journal is awful and careless. And the other big media gobbled this up without thinking twice about it.
There was a video interview of Holmes by some grinning moron from the WSJ posted on Slashdot a while ago. Anyone watching that video could see that this whole story is essentially sensationalistic reporting with no basis in reality. But who cares about facts, it's much easier to call that girl a crook and move on to the next scandal.
I actually cancelled my Audible subscription to the WSJ after watching that interview and doing my own research into this story. Who knows what proportion of their stories are full of bullshit like this one. They remind me of that guy from the movie Shattered Glass.
Hi, Liz. Why did you make up this "lucm" name?
Do you have ESP?
What I don't get is did no one bother to see if her so-called game changing blood tests actually WORKED? I get the impression, no
I'm just kind of dumbfounded that no one thought to check with some actual PhDs, MDs, researchers, etc.
'The unexamined life is not worth living' - Socrates
Yeah total bullshit.
After all, the Centers for Medicare and Medicaid Services haven't proposed pulling Theranos's license (and hence qualification to do tests that can be reimbursed by Medicare and Medicaid), and haven't proposed banning the Theranos founders from running a lab for two years. Oh, wait, they did. http://www.nytimes.com/2016/04...
After all, the company didn't just throw out all the results done on their machines in 2014 and 2015. Oh, wait, they have. http://www.wsj.com/articles/th...
I have no common cause with the Libertarian neanderthals around here that clearly despise and fear women, but in this case, Theranos looks like little more than a scam. But I wouldn't like that to the CEO being a female, since there are no lack of male-run scam outfits who are briefly market darlings before it's revealed that the company's core technology is a load of unmitigated bullshit.
The world's burning. Moped Jesus spotted on I50. Details at 11.
The original article was essentially bullshit
If true, then Theranos could quickly debunk their BS by publicly demonstrating their technology in front of credible experts. Please explain why they haven't done that.
Like my granddad used to say "Working hard at being stupid is much less valuable than half-assing being smart."
Of course, he also warned me to never trust a kraut or jap, so take it for what it's worth.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
More likely it's the fact that Silicon Valley is a liberal/SJW stronghold, where investors will happily throw money at any company with a female CEO.
As we say in California, what are smoking and where can I get some?
http://valleywag.gawker.com/silicon-valley-named-13th-best-conservative-city-in-ame-1458838034
The dead giveaway on Theranos is the splurging of publicity in mass mainstream media without anything at all published in relevant peer-reviewed specialist journals.
As soon as anyone asks why they would do that, the answer is obvious. You'd think.
Aberrations have appeared in my destiny prognostication engine!
More likely it's the fact that Silicon Valley is a liberal/SJW stronghold, where investors will happily throw money at any company with a female CEO.
As we say in California, what are smoking and where can I get some?
http://valleywag.gawker.com/silicon-valley-named-13th-best-conservative-city-in-ame-1458838034
GAWKER?!?!?!?!
Yeah, that's a trustworthy source.
Jesus H. Fucking Christ, you scraped right through the bottom of the barrel.
She owns 50% of the company. This is the poster child for diversification of the portfolio.Theranos is private so the stock is only as valuable as the next private market buyer will pay.
Preferred investors get paid first. She only has common stock. So, nothing left for her no matter how much of the company she owns.
She arrived early, stayed late, and worked through the weekends. Her tech may have failed, but it wasn't because of a lack of hard work.
You know that is actually characteristic behavior of financial fraudsters. They avoid delegating large numbers of essential tasks because they don't want others seeing the books and asking questions. They like to be the first there and last to leave to make sure nobody is nosing around too. Finally they like taking care of certain transactions with third parties over weekends and after hours were things get done 'out of process' and it may be possible to evade some other normal checks and controls.
Its actually considered a good anti-fraud practice to have anyone who handles accounting or inventory to take a least one mandatory five consecutive business day vacation each year! That way someone else has to perform at least some of their job functions for a time and there is a second pair of eyes on things. It also may cause some schemes where things have to be kept in constant motion like 'lapping' to fall apart.
A fraud investigator would consider her 'work ethic' here a reason to be more suspicious not less.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
There's a difference between "value" and "price". The "value" of gold remains nearly constant due to comparatively little change in demand and supply. It's the "price" of gold, when measured in a non-gold currency like the US Dollar, which varies. That variance is due to the "value" of the USD fluctuating due to its demand, but mostly its supply, being far more volatile and not being fixed like gold's is. That's why gold is often referred to as the ultimate store of "value"; its "value" doesn't change much, even if the nominal "price" of it, when measured in non-gold currencies, fluctuates wildly.
Gold is mostly used to make jewelry. And so the demand varies greatly with economic stability. Gold has no magic stability.
Another observation of value: back in 1964, you could've bought a gallon of gasoline for about 20 cents. Those two dimes would've contained about 0.144 troy ounce of silver. At about $16 per troy ounce, the silver in those two dimes is now worth about $2.30. Strangely enough, that's about what you'd pay in today's debased currency for a gallon of gasoline.
20 January 2017: the End of an Error.
Forbes is relying on the written law to figure that out. But this is the age of Obama. As we saw with the GM bankruptcy proceedings during the auto bailout, the government can order the bankruptcy judge to ignore the law and pay whomever the government wants paid. This allowed the union to get paid before shareholders despite the law saying the shareholders had priority.
There is no liar like a right-wing AC liar. In the GM bankruptcy proceeding debts were paid in strict accordance with the law. The bondholders (not shareholders) that were upset about not getting preferential treatment were unsecured creditors, unlike the banks that did get paid off first, and had no seniority in settling GM's obligations. They were in the same asset category as the union to whom GM owed a lot of money, and it is up the administrator of the filing to determine how the parties in the same category get treated.
Second class citizen of the New Gilded Age
I would however suggest that you have a common cause with some group, due to your use of a several highly derogatory terms for people who apparently do not agree with you, but hey.
More to the point, I think a major reason people are giving the responses they are to this long slow train wreck of Theranos is how Ms Holmes was held up to be such a glowing example of the truth and light behind women in business by certain groups. It has become quite apparently that this particular train wreck mostly comes down to her belief that hype and contacts has a billion dollar market value, and others supporting her in this. It is quite clear looking back at the hype machine that a good quantity of that has come from 'And look, she is a woman!', so that is a factor, one that she was quite happy to play.
The takeaway here should really be 'step carefully before you raise someone to sainthood for your cause'. This is of course a common mistake, especially these days (by many many different types of groups of course).
The interesting part comes next - Do the people who truly believe in their cause try and shout down any detraction of her as being sexist, or do they quietly admit there is some egg-on-face here and that she was not the saint she was held up to be. Time will tell.