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One way Theranos is hoping to stay afloat is by offering double the shares \u2014 including some of founder Elizabeth Holmes\u2019 own shares \u2014 to investors if they promise not to sue.<\/p>\n
Theranos is knee-deep in an avalanche of lawsuits from investors<\/a> and consumers of its blood-testing products after it was discovered last year the tests had an accuracy\u00a0problem and didn\u2019t meet with the company\u2019s own standards. Its main partner, Walgreens, has since pulled out and is also suing t<\/a>he company.<\/p>\n According to The Wall Street Journal<\/a>, Theranos\u2019 board approved a move in February to shuffle shares, including from founder Elizabeth Holmes, to investors as a way to appease them.<\/p>\n The deal would include those investors in Theranos\u2019 latest funding round in 2015, which yielded $600 million. But those investors,\u00a0which may include later-stage investors, including BlueCross BlueShield Venture Partners, Continental Properties Co.,\u00a0Esoom\u00a0(Enterprise\u00a0of\u00a0Taiwan), Jupiter Partners, Palmieri Trust, Dixon Doll, Ray Bingham<\/span> and B.J. Cassin, would now get twice the shares for each share they bought in that round, according to the Journal and confirmed by Theranos.<\/p>\n \u201cThis is an affirmative\u00a0development for the company, providing a path forward in partnership with\u00a0employees, investors and other stakeholders,\u201d Theranos director Daniel J. Warmenhoven said in a statement to TechCrunch. \u201cElizabeth\u00a0elected to contribute her own equity to protect any dilution of shares held by other parties.\u00a0In my experience, this is a uniquely structured deal that not only demonstrates a\u00a0sophisticated understanding of our operating environment\u00a0but shows a level of selflessness and grace reflecting her commitment to the company\u2019s success.\u201d<\/p>\n It\u2019s not clear how many shares Holmes is offering up herself, but at least a couple of investors aren\u2019t taking the deal. Theranos has reached a separate agreement with Rupert Murdoch, the executive chairman of News Corp<\/a> and 21st Century Fox<\/a> Inc., who refused to agree to the same deal as other investors \u2014 possibly for tax reasons. Theranos will instead buy back his shares for $1, according to the Journal\u2019s sources.<\/span><\/p>\n Another investor, San Francisco-based hedge fund\u00a0Partner Fund Management LP, which sued Theranos in October<\/a>\u00a0and participated in the $198 Series C round attributed to have driven Theranos to its former $9 billion valuation, also refused the agreement.<\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2014\/09\/elizabeth-holmes11.jpg?w=680\")
One way Theranos is hoping to stay afloat is by offering double the shares — including some of founder Elizabeth Holmes’ own shares — to investors if they promise not to sue. Theranos is knee-deep in an avalanche of lawsuits from investors and consumers of its blood-testing products after it was discovered the tests had an accuracy problem. Read More<\/a><\/p>\n\n<\/img><\/a>
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