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Theranos is offering additional shares to certain existing investors in exchange for a promise not to sue the troubled blood-testing company, per the WSJ. The shares would come from company founder and CEO Elizabeth Holmes and, if enough investors accept, would reduce her holdings below the majority threshold.
Why it's the BFD: Because of its infinite sadness. It's a bit reminiscent of what Zenefits did last summer, except that Zenefits had a viable business that was separate of its troubles. In this case, the core is rotten. Need proof, investor Rupert Murdoch apparently traded in his $125 million investment for a single dollar, in order to just book a tax write-off. Also worth noting that early Thernaos investors apparently weren't offered this deal which, in itself, could become litigious.
Bottom line: "At the end of last year, Theranos had $200 million of cash on hand, not including $40 million in debt to Walgreens that is part of the two companies' legal dispute, Theranos told shareholders in a January conference call. One person familiar with the matter said Theranos now has about $150 million or less in cash, excluding the debt." ― WSJ