The Theranos Story, ch. 42: the 2-for-1 share offer to investors closes, clock ticks

click to enlargeIs this a sincere and generous offer, or staving off the inevitable? Theranos reported this week that it closed its 2:1 new preferred share offer. This was offered only to C-1 and C-2 round investors, the 2014-2015 $600 million round which bought in at about $15-17/per share. The hold on this was released when Theranos settled with Partners Fund Management on 1 May for an undisclosed amount [TTA 2 May].

Theranos claimed that “Holders of more than 99 percent of the shares eligible for the transaction elected to participate. Participants received new shares of the Company’s preferred stock in exchange for their existing preferred stock.” By accepting the offer, they also released any potential claims against Theranos.  Release

Fortune mostly recaps previous events such as the CMS and Arizona settlements. One interesting snippet we missed: when the investor offer was first made in April, there were reports that Ms. Holmes owed her company $25 million, which would have been the exchange basis for the return of her shares. This Editor considers that company survival drove this un-Silicon Valley-like founder equity drain, but perhaps with favorable tax or financial outcomes for Ms. Holmes.

The company buys time, but where is their technology and how much is left in the bank? The clock ticks….  Our index of previous Theranos coverage is here.

Categories: Latest News.

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