Theranos To Investors: Please Don't Sue! Here, Have Some More Shares (siliconbeat.com)

Theranos "plans to give additional shares to investors who pledge not to sue," reports the Wall Street Journal. An anonymous reader quotes Silicon Beat: The deal, which hasn't been disclosed publicly, was approved by the Palo Alto-based company's board last month, The Wall Street Journal reported, citing anonymous "people familiar with the matter." They said most investors have tentatively agreed to the deal. Those extra shares are coming from none other than founder and CEO Elizabeth Holmes' personal cache, the Journal reported. That means the beleaguered founder, who has remained stubbornly at the helm of her struggling startup even though federal regulators have barred her from running a medical lab for two years, would give up her majority ownership in the company.

Comments

funny how that works.

[nimbius]

theranos: for the love of god and all thats holy, please do not litigate.

Uber: every week we get a new lawsuit, cities are outlawing us, countries have banned us or taxed our business model, workers have united and are forming unions, we actively thwarted regulatory attempts with greyball, our drivers have turned out to be serial killers and rapists, and our president just quit...but uh...i guess we're still worth ten billion dollars ya know!?

Wow, that's a deal...

[mhkohne]

This is...quite something. She's still in charge (and collecting a paycheck, presumably). She'll get rid of some of her shares, AND drop being majority stakeholder, so she can get fired by the board, instead of quitting, thus triggering whatever golden parachute she's got. If she's smart she'll sell off the rest of her shares before the whole things winds down.

From the investor's side, I guess it makes sense - if they start suing, the lawyers probably end up with all the money, so just letting it play out might be their best hope for a return.

Sigh. For all the problems it has (and the FDA has many), this kind of nonsense is why it exists in the first place.