siddharth18
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Posts posted by siddharth18
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U.S. Files Criminal Charges Against Theranos’s Elizabeth Holmes, Ramesh Balwani
WSJ (paywall) link: https://www.wsj.com/articles/u-s-files-criminal-charges-against-theranoss-elizabeth-holmes-ramesh-balwani-1529096005
Bypass paywall link: https://outline.com/dUwMC4
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How could someone have spotted Theranos as being a fraud prior to this becoming publicly known?
https://www.bloomberg.com/view/articles/2018-05-30/theranos-fatal-flaws-were-in-plain-sight
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The article given is from a blogger well known for stretching the truth in search for pageviews. I take everything he says with a massive grain of salt.
Yeah I was surprised to see an article on CNBC about FinancialSamurai. Almost reads like a thinly veiled advertorial.
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Ericolopoly,
You can't win either way....sorry...and sorry about what’s going on. However....
So put an outrageously large one time payment together and close all open arguments. Forget math, stocks, emotions about the amount of money. Your kids are more important. While you are a retired dude and have been the entire time......man you are crazy smart...you will figure out a way to make the money back in the future sorry you will have to go back to work.
I have done this with friends (which I consider you) before and I am not a lawyer.
All the best,
Dazel
So according to you, he should simply "put an outrageously large one time payment together" (that likely represents a lifetime of saving+patience+discipline+foresight+risk taking+luck, that may or may not be repeated in the future) without thinking it through...just because...he's crazy smart and figure out to make money back in the future? And also because "kids are more important" ?
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FWIW I've been through this a couple of times.
If there is any way possible, Eric should try to work out something with his wife. Find out what she wants most & give it to her if you can get some of what you want. Be willing to give more than you take. The way the divorce system works works, the man will be disadvantaged anyway. Don't fight about custody; be concerned about visitation.
Even if a separation starts off amicably, the process mostly leads to open warfare. It's obviously in the best interest of the attorneys for it to be this way.
This going to be very expensive in terms of legal fees and the aftermath. The wife is trying to establish Eric as a professional investor and use his income from such during the bull market as a baseline for spousal support. If successful, this will be a disaster.
The absolutely most important thing for Eric is to get a top notch local attorney who specializes in family law, ideally one whose primary practice is representing male clients. He should be familiar with the local judges and know their biases. He should be a tiger.
Until you go through one of these things, you have no idea of how much power domestic court judges have. When my #2 ex-wife decided to court to get more money out of me, the judge hearing the decree modification request interrupted my attorney (on the record) saying that he didn't care what our agreement said or what the previous court had ruled, he was going to decide whatever he wanted to.... and he did. My attorney was not very good.
There is a lot of money involved here, judges don't have to be logical, and there is a big difference in attorneys. From what I've read here, I don't have much confidence in Eric'S current attorney.
Best of luck to Eric during this difficult process. There is no sugar coating on this.
Agree with all of this. Realize that you're fighting an uphill battle; so the wisest way to "win" is to avoid turning it into a war. If this does turn into a war, then finding the best attorney has got to become a full time job because your fortune (literally) depends on it.
I don't have experience with family law specifically but a while ago when I needed an attorney in a different specialty - the wisest advice I got was to find an attorney that is "familiar with the local judges and knows their biases."
Your goal should be to find an attorney who has a solid history and reputation (with the local judges) as someone who's sharp, knowledgeable and won't hesitate to appeal an unfair decision. Basically - the judge needs to know your attorney's aggressiveness and his past actions in order for him to resist making a biased or unfair decision. This is because judges don't like their verdicts being overturned on appeal, so they are likely to be less biased in their ruling if they see a familiar attorney who has a history of appealing egregious verdicts/rulings.
And to anyone reading this: don't get married.
+1
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So there's no honor among CDS traders?
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But he was totally free to raise the price of Daraprim without committing securities fraud.
Well I, for one, do not think he should be punished for raising the price. He played a legal game where the incentives rewarded him for raising the price so that's what he did.
I agree with you that laws are sometimes selectively enforced. But that's not a good excuse for breaking them.
If I'm not mistaken, I think Preet Bharara or Eric Holder, in one of their interviews, is asked about this. About why no bankers during financial crisis went to jail. And the answer was basically that the burden of proof required to prove criminal guilt is very high. And prosecutors are reluctant to bring a case that isn't a slam dunk because the loss can set a dangerous/unexpected precedent and is very demoralizing to the staff.
In some way, winning a case is less about that case itself and more about preventing 10 similar cases. This dynamic is especially exacerbated when the department is understaffed.
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Hundreds of billions of shareholder wealth has been created this way, you're just neglecting the ugly side of capitalism. Progress isn't all peaches and cream, you need sociopaths to move society forward. It's just how it has always been.
That's a very myopic way of looking at things. A world filled with Shkrelis and Holmes would be a world where executives would chronically misrepresent their firm's financial position for their personal gain. That would be a transmogrified world where distrust would be rampant, markets would be very inefficient and the cost of capital would be extremely high. It would place the honest executives at a disadvantage due to market's inability to discern the money-good from money-bad. The rising cost of capital and the opportunity cost of society's inability to fund innovation would be a lot more than hundreds of billions.
I also reject the notion that Shkreli was somehow unfairly treated or picked on, merely because he opposed a candidate or insulted the regulators or hiked the price of a rare drug. Actually his case had nothing to do with the price hike or unpopularity with the politicians or the media. The feds started probing Shkreli long before media picked up on his price hike or made him infamous. Secondly, he refused to show remorse or admit wrongdoing until he a few hours before sentencing.
He wanted to loudly vindicate himself and prove his theory that him defrauding his investors was A-OK. So for the regulators, it wasn't just about proving Martin wrong, but all the future wanna-be Martins wrong. Shkreli insisted on a high-stakes, ego-driven showdown and that's what he got.
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I am sorry but you are wrong, and all you have to do to see it is look at the case of Martin Shkreli. He was thrown in jail for "securities fraud" even though he ultimately made his investors all of their money back. He was a fraud who came through and did create a lot of value for society, and yet we punished him anyway because he rubbed the establishment's noses in the fact that he was a real Robin Hood type of character. Now Martin has a jail sentence, and for what? Raising prices to reinvest in new product R&D for sick people?
Elizabeth Holmes could have been the same sort of redemption story, but instead we threw the book at her too. There's only one rule in America: don't embarrass the Hillarys of the world or no matter what your contribution to society you will find yourself behind bars.
So using your logic, you'd let a future Shkreli defraud you out of your money as long as he insists after defrauding you that he will ultimately make you all your money back and create a lot of value for society?
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You guys are missing the point as usual. Sometimes founders have to create grand stories to raise the money to finance the work to get to the point that they aren't stories anymore. So many great companies have been built this way that it's very typical of a value investor to jump all over the leaders who fail to make the transition. Reflexivity is real and Holmes did not prove as skilled at mastering this art as Musk, Trump or Bezos.
Classic case of value investors missing the point, again.
So is it fraud to use your marketing skills to highlight the amazing stuff you've been able to accomplish, so that people will want to continue to finance you despite ongoing operating losses? A lot of people are jumping ship at Tesla. That's usually not a great sign. Maybe Google will buy Tesla if public perception falters and finance Musk. It'd be more sensible than any other project.
Or maybe the public will continue to finance him so long as he continues performing technological marvels, operating performance issues be damned, and one day the infrastructure will really come together. Who knows?
There's a big difference between selling a future dream/vision and lying about past and present facts. I think that's where Theranos crossed the line. If you read SEC's complaint, they highlight multiple instances of egregiously false statements originating from the top, just to keep the story alive. Theranos went beyond simply "highlighting the amazing stuff." It began fabricating facts that it knew didn't exist. For instance, Holmes told that Theranos’ technology had been deployed by the DOD in Afghanistan when that was never the case. I don't know if Bezos ever made factually incorrect claim, that he knew was false, to raise capital.
Such lies are not the same as consistently overestimating future production levels because investors treat, or should treat, a statement of fact issued by a company differently than forward looking projections. There's a HUGE difference between saying "our company has $1B cash on the balance sheet today" VS "We predict our company will have $1B cash on the balance sheet by next year."
I think the only reason Theranos' BoD were consisted of accomplished heavy weights (rather than experts in the medical field) was to keep the story alive. A BoD consisting of medical experts would smell Holmes' BS must faster than Kissinger and Mattis might. At the same time, having Kissinger, Mattis and Boies on the Board gives a much stronger aura of legitimacy which would then allow Theranos to fly under the radar for as long as possible. Textbook definition of a "con artist."
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I don't think that the SVXY volatility options were nearly as obvious a bet as you think. They are hugely path-dependent. In other words, if implied volatility goes from 10 to 30 in 10 days, it's a very different outcome for SVXY than if it goes from 10 to 30 in one day (like the difference between SVXY falling to 90 and SVXY falling to 12).
In fact, I think that the only reason SVXY is trading around 12 now is because hedge funds manipulated the VIX futures to ensure that on the one bad day, SVXY would fall to 15 rather than 60 (immediately after the market closed--in the 15 minutes before SVXY was valued--the VIX futures spiked to 37, and then immediately fell back to the high 20s, basically ensuring that SVXY would do far worse than it would've done if it were priced when the market closed).
What's more, when you're holding the SVXY puts, you're not just suffering time decay on the options, but dealing with the growth in SVXY itself as a result of the contango in the futures. So, I think leap puts on SVXY was not at all an obvious bet.
Do you have any thoughts on deep out of the money 2020 UVXY puts?
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How is this accessible to US residents?
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I believe you have to be person of Indian origin - meaning either born in India or have some ties to India. If you have no ties, then I don't think you qualify.
FDIC insured?
Not at all lol. You'd be putting money in the Indian version of State Bank of India, not the American version (which is FDIC insured). In that case, I guess you would have a Indian version of FDIC guarantee, which is worth INR100,000 which is less than $2000.So basically, you're a unsecured creditor of State Bank of India, if things turn bad right?My goal was to find State Bank of India's dollar borrowing cost in the bond market. Knowing what the market thinks about SBI's creditworthiness would be an interesting data point. Is there an easy way to find this?
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So State Bank Of India is offering 3.15% fixed guaranteed return on US dollar denominated, 1 year fixed deposits of $100k or more.
You're essentially loaning dollars to the biggest in India, that is majority owned by the Government and has been around for 200+ years.
I was wondering if anyone has insights on how to assess the counter-party risk here? Is there a way to find out SBI's dollar borrowing costs in the international bond market? Would be great if anyone can elaborate on how to think about it in terms of the worst case scenario.
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Wow...the airline stocks are getting hammered. EasyJet down almost 20%
International Consolidated (parent of british airways, Iberia, etc) - down 26%
LSE website (http://www.londonstockexchange.com/) is down.
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FB is the better investment over 10 years, 15 yrs, etc.
The founder/CEO is not even in his 40s. He is maniacal about maintaining and growing FB's moat, and will throw wads of cash at whomever can threaten it in a few years (e.g. look at what happened with Instagram).
I am fairly confident about FB being a decent long-term idea yet I don't own FB. A general Internet section correction could shave off 30% off the stock. Waiting for a better entry point. That's my weakness.
I don't own BRK either.
To your point about throwing money at anyone who threatens the moat - it worked with Instagram but failed with Snapchat. Technology is such a fickle beast.
Too hard for me to answer, FWIW.
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The way I think about hedging is really simplistic (maybe too naive), but it's this:
Do I want to bet on the things that I understand and can reasonably foresee (which would be the price per share of the company I'm buying) or do I want to make a macro currency bet? For those opting for the former, it should be straightforward. By not hedging aren't you implicitly betting that the foreign currency will either stay flat or go up in value relative to your home currency?
With currencies you are always making an implicit bet on something, and it really shouldn't be called hedging because you are either long your home currency or long some foreign currency. It is not possible to have a hedged position with zero exposure.
Well the bet that I make is that I'm too uninformed to predict the direction of currency, hence I only wish to benefit from the change in the underlying stock price without the results getting distorted by change in currency values...if that makes sense? I do not wish to add an additional variable (currency values) into my ultimate results. Because without hedging you have got to believe your home currency will weaken...and I feel like it's best to hedge if you have no view on the currency's future value.
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The way I think about hedging is really simplistic (maybe too naive), but it's this:
Do I want to bet on the things that I understand and can reasonably foresee (which would be the price per share of the company I'm buying) or do I want to make a macro currency bet? For those opting for the former, it should be straightforward. By not hedging aren't you implicitly betting that the foreign currency will either stay flat or go up in value relative to your home currency?
I never want to make a macro currency bet, meaning I neither want to suffer due to the foreign currency weakening nor do I want to be unexpectedly rewarded if my home currency weakens - that is fine with me. The only overall benefit I seek is to gain or lose an equivalent % of change in the underlying stock that I purchase. And in order to do that, I need to hedge all the time. The only downside here is the cost of hedging and probably lose out on the upside if my home currency indeed weakens. But I can live with missing out on things that I never foresaw....
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Oh man...a film about my hero Dr. Mike Burry - can't wait!!
It must be pretty surreal to be Dr. Burry in the last 15 years....leave medicine, start a hedge fund, bet against the big boys, win big, get famous, get a book written, get a movie made...all because of his tendency to "think independently." Even more surreal is the fact that he is very shy, awkward and wants the furthest thing from publicity.
I know films need the guns, hot girls, fast cars to appeal to a wider audience but I hope it actually shows that Dr. Burry and the other shorts went through during late 2005-early 2007 when the outside investors began questioning Burry, threatened to pull money out, made Dr. Burry physically sick.
Also, does anyone know if Jeff Greene will be depicted in the film? He'd probably make a great and entertaining character for the film given his tendency to live large...plus he loves publicity.
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It's a bit tricky to figure out what he's doing, and where the money that he ends up making, coming from. I actually got more curious about the person when he dropped Ben Graham's name...does it have anything to do with financing a quasi-company with convertibles? The only passing resemblance to what Graham/Buffett say and what he does is getting more in value than what he gives up, and he does do that. And that's based on what I know about Graham/Buffett, not what Sason says or what Bloomberg interprets it to be.
As far as I can tell, he's offering loans to companies (which ought to be savvy counter-parties) and pretty much gets a guaranteed return as long as there's liquidity. His risk is not just repayment but also liquidity. And as far as I can tell, there is no such thing as an "unfair" deal if there's no coercion or deception.
Maybe I read the article too fast...but can someone explain to me what part is "shady" or "manipulative" or causes a "moral dilemma" ? The companies do read the debt indentures right? And the shareholders who buy the shares do realize their company is not solvent right? Seems like Sason has found out a nice way to monetize the market's inefficiency (stupidity?)
Or maybe I just read the article too fast...
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Was going through some old Forbes magazines and came across this article on David Baazov.
How does a 30 something old guy with nothing, convince Blackstone and other banks to lend him $5 billion to buy the biggest online poker site?
It blows my mind what can be accomplished when you don't up. Seems like the way to get anything is to just try it a few more times.
Read it here - http://www.forbes.com/sites/nathanvardi/2014/12/01/the-king-of-online-gambling-is-34/
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ESI has a 10-year average net income of $7.5 and is trading at $10 (was at $4 for a few months).
The question is what will be it's net income, going forward...
(I haven't researched the idea, but based off of your post, why should 10-year avg net income matter, given how the industry has been in a flux since the last few years...?)
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Anyone looking at bear put spreads on $TLRY?