There was a piece in a Vanity Fair article on Theranos that boiled down the Silicon Valley business plan perfectly. I’ve pasted it in the comments section. 

But suffice to say – the punch to the face that was the WeWork IPO (down 80% valuation when bankers have to buy it?!) coupled with the trade war and fears of recession and investors are taking a pause and evaluating the companies they own… does this business plan make sense?  And, most importantly, even though it’s a great business, does it have any chance of making me money in the long term and justify the risk of owning it?

Over the last 4 posts we have celebrated the CFO of O&G companies who fix the balance sheet; we have spoken in broad strokes about hypocrisy – say what you are doing, and do it; be transparent about the business model and yesterday focusing on the actual assets of the business and can you make money.  In a business where the rock IS the value, you better know what it can… and can’t do. 

In 2020- there will be nowhere to hide.  If your business doesn’t make sense… you are going out of it.

#hottakeoftheday