The heart of the problem, Carreyrou writes, was that “Holmes and her company overpromised and then cut corners when they couldn’t deliver.” To hide those shortcuts, they lied. Theranos invented revenue estimates “from whole cloth.” It boasted of mysterious contracts with pharmaceutical companies that never seemed to be available for viewing. It spread the story that the United States Army was using its devices on the battlefield and in Afghanistan — a fabrication.
Even for a private company like Theranos, disclosure is the bedrock of American capitalism — the “disinfectant” that allows investors to gauge a company’s prospects. Based on Carreyrou’s dogged reporting, not even Enron lied so freely.
via How One Company Scammed Silicon Valley. And How It Got Caught. – The New York Times.
