MONDAY KETCHUP: eLIZabeth Holmes, Buffettpalooza and folksy capitalism, and a Board Sabermetrician view of Berkshire
Live from Buffetpalooza, it’s yet another Manic Monday edition of Business Pants. Joined by the Lord of the BS. In today’s throaty ESG gag called May 8, 2023: Sexy Story Updates, Sexy Warren Buffett, and Sexy Board Sabermetrics!
DAMION1
America’s favorite failed blonde CEOs are in the news
Believe it or not, the biggest story in the business news is based off a NYTimes piece called: Liz Holmes Wants You to Forget About Elizabeth: The black turtlenecks are gone. So is the voice. As the convicted Theranos founder awaits prison, she has adopted a new persona: devoted mother.
So after reading the dumb article and spending 90 minutes trying to craft a boring story I decided to let the headlines do the talking:
Meet the 'new' Elizabeth Holmes: She's ditched the turtlenecks, abandoned the weird voice, and wants you to call her Liz
Theranos founder, Elizabeth Holmes, delays prison time and awaits appeal in Del Mar beach house
Elizabeth Holmes spent 6 months in RV sleeping in Walmart parking lots
Elizabeth Holmes ‘giggles’ about the infamously deep voice she once used — and even her partner mocks it
Elizabeth Holmes Says Amanda Seyfried Was Playing a ‘Character I Created’ in ‘The Dropout’
Glowing Elizabeth Holmes Profile in New York Times Draws Fury Online: 'Got Conned Just Like Her Board'
NY Times blasted over 'puff piece' on convicted fraudster Elizabeth Holmes: 'Nice to be a pretty white lady'
Cute! New York Times Helps Elizabeth Holmes Launder Her Reputation Before Prison
New York Times dragged for Elizabeth Holmes profile: 'Very embarrassing'
Elizabeth Holmes torched an effigy for Theranos at Burning Man
Elizabeth Holmes said she still believes Theranos could have revolutionized healthcare and is working on new inventions: 'I still feel the same calling to it'
“The New York Times is simply unserious”: Elizabeth Holmes' Times profile sparks backlash online
Yes, That Elizabeth Holmes Voice Was Fake
Reactions
Former CNN host Soledad O'Brien wrote on Twitter: "Nice to be a pretty white lady working your charm on a nyt reporter."
Todd Schulte, President of FWD.us, a political advocacy group co-founded by Mark Zuckerberg and Joe Greene (Facemash co-founder at Harvard) tweeted this:
Media outlets make choices every day on how they cover people in the criminal justice system.
This story, by the numbers:
-95 paragraphs(!)
-0 uses of the term convict, felon, offender
-1 photo of the family at the beach
-1 subheader with "devoted mother"
There are lots of Elizabeths-many are devoted moms.
Pick your closest analogy--a random Liz with two kids, convicted of fraud around drug charges...and ask yourself why the details of her life and what long incarceration means are any less meaningful?
Pls dont read this as a call for more punitive coverage, let alone sentences. It's not. It's that all the Elizabeth's deserve the chance for the world to understand (and society to change) what many years in prison will mean for their families as much as the super rich white ones.
The NYT Elizabeth Holmes profile can be summarized in: "This woman committed fraud and put a lot of people's health in danger while driving a man to his suicide but hey, she's also a mom and volunteers in a rape-crisis hotline, so how bad can she really be."
NBC Bay Area reporter Scott Budman, who covered both Theranos and Holmes’ trial, specifically took issue with the profile’s last line, which asserted that “if you are in her presence, it is impossible not to believe her, not to be taken with her and be taken in by her.”
“The last line of the New York Times story is wrong,” Budman wrote on Twitter. “It is possible to be in her presence and not completely believe her. Questioning is what we do for a living.”
Originally due in prison on April 27, when she had been required to report to Federal Prison Camp in Bryan, Texas, for 11.25 years. (Shortly before she was due at prison, Ms. Holmes made a last-minute request to remain free pending an appeal, which automatically delayed her report date by an undetermined amount of time.)
Ms. Holmes has not spoken to the media since 2016, when her legal team advised she go quiet.
In case you’re wondering, Ms. Holmes speaks in a soft, slightly low, but totally unremarkable voice, no hint of the throaty contralto she used while running her defunct blood-testing start-up Theranos.
If you hate Elizabeth Holmes, you probably think her feigned perma-hoarseness was part of an elaborate scheme to defraud investors. If you are a person who is sympathetic to Ms. Holmes, then the James Earl Jones inflection was a sign of the impossible gymnastics that female founders must perform to be taken seriously. If you spend time with Ms. Holmes, as I did, then you might come away like me, and think that, as with many things about Elizabeth Holmes, it was both.
In Elizabeth Holmes, we found an all-you-can-eat buffet. It had everything: The black turtlenecks, the Kabuki red lipstick, the green juices, the dancing to Lil Wayne. Somewhere along the way, Ms. Holmes says that the person (whoever that is) got lost. At one point, I tell her that I heard Jennifer Lawrence had pulled out of portraying her in a movie. She replied, almost reflectively, “They’re not playing me. They’re playing a character I created.”
I was admittedly swept up in Liz as an authentic and sympathetic person. She’s gentle and charismatic, in a quiet way. My editor laughed at me when I shared these impressions, telling me (and I quote), “Amy Chozick, you got rolled!” I vigorously disagreed! You don’t know her like I do!”
So, why did she create that public persona? “I believed it would be how I would be good at business and taken seriously and not taken as a little girl or a girl who didn’t have good technical ideas,” said Ms. Holmes, who founded Theranos at 19. “Maybe people picked up on that not being authentic, since it wasn’t.”
I realized that I was essentially writing a story about two different people. There was Elizabeth, celebrated in the media as a rock-star inventor whose brilliance dazzled illustrious rich men, and whose criminal trial captivated the world. Then there is “Liz,” (as Mr. Evans and her friends call her), the mom of two who, for the past year, has been volunteering for a rape crisis hotline. Who can’t stomach R-rated movies and who rushed after me one afternoon with a paper towel to wipe a mix of sand and her dog’s slobber off my shoe.
“Finding your person in the middle of all of this and experiencing that love when you’re going through hell is the most beautiful thing I’ve ever experienced.”
I’d hardly sat down in Ms. Holmes’s and Mr. Evans’s home the first time we met in person, when Ms. Holmes told me about her work at the rape-crisis hotline. She’d just finished a 12-hour shift, which she does a few times a week from home using her cellphone, answering calls when they come in.
She then put this work into context, telling me how surviving a rape at a fraternity party her sophomore year at Stanford had, in retrospect, colored so many of her life choices. It’s the part of her story that she keeps getting back to. The one she told a sympathetic, but ultimately undeterred jury, according to news reports.
Mr. Evans, whose parents are prominent hoteliers in San Diego, and Ms. Holmes have an us-against-the-world ethos that is both romantic and rings slightly of Bonnie and Clyde. They say they’ve been chased out of residence after residence, no matter how remote. On my way to their front door, I walk past rows of orange storage containers filled with the couple’s personal belongings. They never unpack, Mr. Evans explains, concerned they’ll have to move again when they’re found.
The morning we went to the zoo, Mr. Evans stopped at Starbucks. He returned to find the barista had written “Billy the Kid” on his coffee cup. Ms. Holmes didn’t get the reference.
Billy Evans, heir to a chain of hotels in California, took a few calls for work while I was visiting. I asked what he does. “A lot of different stuff, investing, starting companies,” he replied, without elaborating.
Evans Hotel Group: 11 white leaders (pretty impressive in a city that is 42% white)
It’s CSR section on its website shows a picture of 23 of its employees (0% white)
Their toddler, William, recently had a 105-degree fever, the couple said. They raced him to the emergency room. The first thing the attending doctor said was, “You look a lot like that horrible woman.” Ms. Holmes looked at him with her piercing blue eyes, and said, “I’m sure you’re a better person than she is.” The doctor seemed to realize who he was talking to. She continued, “Then he said, ‘Are you Elizabeth Holmes?’ And I said, ‘Yes,’ and he said, ‘I am so sorry,’ and I said, ‘Don’t be, all you know is what you’ve read.’”
Ms. Holmes said she believed that making herself the poster girl for women in tech put a huge target on her back. She regrets being the subject of fawning magazine covers (though I imagine the authors of those stories regret it more). “I never lost sight of the mission but I think I did of the narrative,” she said. “The story became this story that was totally snowballed away from what we were actually talking about.”
Ms. Holmes chooses her words carefully when I ask if the prominent men who invested and joined the Theranos board were drawn to the start-up partly because the founder was an attractive young woman. “A lot of people were attracted to this for their own reasons,” she said.
Over antioxidant smoothies, Ms. Holmes told me she has ideas for Covid testing, drawing on her work in a Singapore lab as a college student during the SARS outbreak. She maintains the idealistic delusion of a 19-year-old, never mind that she’s 39 with a fraud conviction, telling me she is still working on health care-related inventions and would continue to do so behind bars.
The last day I spent with Ms. Holmes, I parked and walked up the long driveway to find her and Mr. Evans embracing in the kitchen. They looked like they were slow dancing, swaying slightly, the two of them against the world. Fireplace burning. Seagulls flying overhead. Teddy drooling in his crate. Babies (plural) sleeping.
That Friday, the couple were getting ready to host a group of friends from the Bay Area. They invited me to stay. They repeatedly invited me to come back, to bring my family. We could all go to the zoo together.
I appreciated their hospitality, but I didn’t fully understand it. Usually interview subjects can’t wait to get rid of me. Then I realized why they kept opening the door wider. Ms. Holmes is unlike anyone I’ve ever met — modest but mesmerizing. If you are in her presence, it is impossible not to believe her, not to be taken with her and be taken in by her. Liz Holmes and Billy Evans know that. I politely declined their invitation.
Ex-Yahoo CEO Marissa Mayer admits spending $4B for Netflix—now worth over $140B—would’ve been a better ‘transformative acquisition’ than Tumblr
“I think Netflix was $4 billion and Hulu was at $1.3 billion at the time,” she told Tech Brew. “And either of those, with hindsight being 20/20, would have been a better acquisition.”
Speaking od dumb investors: OpenAI CEO Sam Altman tweeted this over the weekend:
being a VC is so easy, so high-status, the money is so great, and the lifestyle is so fun.
very dangerous trap that many super talented builders never escape from, until they eventually look back on it all and say “damn i’m so unfulfilled”.
investing is an amazing very-part-time job, and (at least for me) a soul-sucking full-time job.
BUT
those mountains in aspen aren’t gonna ski themselves, that party in saint-tropez isn’t gonna enjoy itself, that kiteboard on necker island needs someone to fly it, etc etc etc.
And finally, the other big and boring news of the day: here’s my Buffettpalooza segue:
Buffett '100% comfortable' with choice of Greg Abel as Berkshire CEO successor
Also, page 10 of berkshire Hathaway’s 2023 Shareholders Guide: Dairy Queen Locations (8 of them)
MATT1
Over the weekend, the annual Folksy White Haired Billionaire Who Isn’t Dead Yet But We’re Worried Will Be Soon convention happened - the Berkshire Hathaway AGM.
Highlights:
When you walk into the event:
At the open, he introduces his entire board, starting with Howard Buffett and Susie Buffett. Finishes introductions with “that’s as good as you can get.”
Really?
On his succession plan:
“Greg will succeed me,” Buffett said. “He will be sitting in a position where his equivalent — or something close to his equivalent, because he’s better at many things than I’ve been — he will need that substitute. When the question comes, we know Ajit’s opinion on that. But Greg will probably be the one that will make the final decision,” Buffett said.
On AI:
“We’re going to see a lot more robotics in the world,” Munger said. “I’m personally skeptical of some of the hype in AI. I think old fashioned intelligence works pretty well.”
On his folksy investment in Apple:
“I don’t understand the phone at all,” Buffett said. “But I do understand consumer behavior.”
“Apple has a position with consumers where they’re paying 1,500 bucks or whatever it may be for a phone. And the same people pay $35,000 for having a second car, and [if] they had to give up a second car or give up their iPhone, they give up their second car. I mean, it’s an extraordinary product.”
On Elon:
“Elon Musk overestimates himself, but he is very talented,” Munger said.
Musk “wouldn’t have achieved what he has in life if he hadn’t tried his unreasonably extreme objectives,” Munger continued. “He likes taking on the impossible job and doing it.” Conversely, he said, “Warren and I look for the easy job that we can identify.”
Buffet affirmed that he and Munger “don’t want to compete with Elon.”
“We don’t want that much failure,” chimed in Munger.
On carbon/energy transition:
Munger said there have been false claims about climate change, but the energy transition makes sense for some key reasons.
“Even if we weren’t worried about global warming, it would make sense to shift to renewables to conserve our hydrocarbons,” Munger said.
“There’s certain things hydrocarbons can do that nothing else can do,” he added. “And there’s only so much of them there, why be cautious in conserving them?”
Munger also said he isn’t sure how bad climate change is going to get.
On bank executives:
“If you run a bank and screw it up, and you’re still a rich guy… and the world goes on, that’s not a good lesson to teach people,” he said.
On the social media meme bank runs:
“That’s the world we live in,” Buffett said. “It means that a lighted match can turn into a conflagration, or be blown out.”
Board Sabermetrics on Berkshire:
Buffett himself has 66% of influence (if you count that the paragon of governance also has Munger, Ajit, Abel, and Buffett’s daughter and son on the board, he actually commands 83% of the influence - amongst the highest in the world)
Explains the collective freakout about his eventual pending death
Abel (successor) has 3% influence today, Jain has 3% influence
How does he get it?
Structural influence
“Founder” with large shareholdings
Dual class shares
Family consolidation of power
Heavy insider presence
Scenario analysis
Buffett dies, Munger survives
