Team-BHP - Startup shenanigans

Loss or break-even? Zomato blinks months after claiming break-even of food delivery biz

Source

Quote:

When Zomato shared its result for the first quarter in August, it played up the number zero. It had claimed that the food delivery segment had broken even in terms of ‘Adjusted Ebitda’.

But, that was not really true.....

In today’s shareholder letter on September quarter performance, the company revised its Adjusted Ebitda for the food business in the June quarter from zero (implying break even) to a loss of Rs 113 crore.

Quote:

Originally Posted by Samurai (Post 4417638)

Theranos is undisputedly the most dishonest startup ever. It started with a science fiction product, could never make it work, but they kept going for 12 years before they were caught. I have mentioned the book that describes it all in the book thread. It managed to get $900 million in private investment without proving their product in demos or in the market.

Elizabeth Holmes sentenced to more than 11 years in prison for fraud

https://edition.cnn.com/2022/11/18/t...ing/index.html

Quote:

Before the sentencing was announced, a tearful Holmes spoke to the court in San Jose, California. “I loved Theranos. It was my life’s work,” she said. “The people I tried to get involved with Theranos were the people I loved and respected the most. I am devastated by my failings.”

She also apologized to the employees, investors and patients of Theranos. “I’m so, so sorry. I gave everything I had to build our company and to save our company,” she said. “I regret my failings with every cell in my body.”

“The judge imposed a powerful sentence that confirms that fraud cannot masquerade as innovation in Silicon Valley,” said George Demos, a former SEC enforcement attorney and adjunct law professor at UC Davis. “When given the opportunity to speak, Elizabeth Holmes made a statement that she takes responsibility for Theranos but did not say she takes responsibility for the fraud.”

She still didn't admit to committing fraud. :)

https://www.moneycontrol.com/news/bu...t-9561221.html

Quote:

Nykaa’s 5:1 bonus issue has raised concerns about alleged weak governance practices at the recently listed startups. In an interview with Moneycontrol, corporate fraud-investigation expert Vidya Rajarao claims the bonus issue cheated retail investors, points to those who allegedly failed in their duty to protect these investors and states that this is a reflection of a larger problem.

Another one close to home but a somewhat milder case. But the valuation of this company is in my opinion close to a ponzi as well. A company retailing cosmetics is doing nothing that great to merit a 1000x PE!!!

Quote:

Originally Posted by green_ninja (Post 5441825)

True. The reason why software companies command 100x or more valuation is because of scalability. Once built, a software can be sold 100, 1000, or even million times. This concept doesn't apply to physical items like cosmetics. There is high variable input cost, unlike software which has mostly fixed input cost.

https://www.moneycontrol.com/news/bu...e-9672411.html

Quote:

The BharatPe-Ashneer Grover saga continues. Many expected the mercurial founder's upcoming memoir (titled Doglapan) to serve as a conclusion to a tumultuous episode that culminated in his resignation and the firing of his wife and others from the company earlier this year. But, those at the helm of BharatPe seem to have had other plans.

Yesterday, the fintech unicorn filed a civil suit against Ashneer Grover, his wife Madhuri Jain, and other family members, seeking over Rs 88 crore in damages for alleged misappropriation of funds.

In addition, the company has filed a criminal complaint with the Economic Offences Wing on 17 counts, including embezzlement, forgery, and criminal breach of trust, which could land the Grovers in jail for up to ten years if proven guilty.

Moneycontrol accessed and reviewed a part of the 2,800-page civil suit filed by BharatPe against the Grovers, which alleges an astounding web of fake bills and misappropriation of company funds for personal use.

I thought this guy was just an arrogant p***k but it turns out he might be a thieving shyster! Startup shenanigans indeed! rl:

Quote:

Originally Posted by Samurai (Post 5441670)

Elizabeth Holmes sentenced to more than 11 years in prison for fraud

https://edition.cnn.com/2022/11/18/t...ing/index.html

She still didn't admit to committing fraud. :)

There's a quote I've heard in the US; maybe common culture or some movie/ TV reference..

No matter what happens.. Deny Deny Deny! :P

I wonder if she will have post prison fame or leverage in the aftermath.

Quote:

Originally Posted by crashnburn_in (Post 5457274)

I wonder if she will have post prison fame or leverage in the aftermath.

There will be a book or two written. She will pen her memoirs. There will be a movie or two made.
She will sell the rights and enjoy Royalty income in perpetuity - definitely these will be sums which are far higher than the per capita income in most parts of the world and she will live to a ripe old age with the best medical care. Who knows she may even do a cryo freeze or be a part of the group who buy Martian real estate.

Such is the way of the world.

Quote:

Originally Posted by deathwalkr (Post 5478329)

Does this belong here?

"GoMechanic founder admits to financial reporting errors, to lay off 70% of workforce"

https://www.moneycontrol.com/news/bu...t-9885111.html

From the link above:

Quote:

"Our passion to survive the intrinsic challenges of this sector and manage capital, took the better of us and we made grave errors in judgment as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret," Bhasin added.

This is why good communication skills are important - try to articulate oneself out of what mere mortals know as "chori chakari"

Quote:

Originally Posted by One (Post 5478335)

From the link above:

This is why good communication skills are important - try to articulate oneself out of what mere mortals know as "chori chakari"

For reference how things have moved (past vs today)

Financial Fraud => Error in judgment
Sexual Harrassment => Also error in judgment
Failure => Lesson ( yeah, let's move on quick )
Accountability/Responsibility towards customers => We don't own anything, we operate "light" so not responsible
Profit => GMV => Valuation (often financial jugglery of numbers )
Marketing => Hype
Actual Delivery => Promise or dream (for the future, that likely will not kept or diluted).
Accepting/Honesty => Wordsmithing ( yeah, I promised you that but you didn't ask me if it is applicable at all times; here's when it is not )

Generally speaking ( not in this context ), I'm appalled at how many intelligent minds take ethics or others' intelligence for granted. Most of the world is operating like a "hit and run" - you make mistakes ( deliberately or otherwise ) and move on before you are held accountable.

Which is why I still trust older companies and establishments ( big or small ). atleast they have something to protect - their reputation, their ethics and their customerbase.