E62: Elizabeth Holmes verdict, fraud origins & takeaways, navigating "The Great Markdown" & more

**Chamath Palihapitiya** (0:01)
Happy New Year! It's now, it's candle season.

**Jason Calacanis** (0:08)
Oh, God. Look at the equanimity. This is equanimity.

**Chamath Palihapitiya** (0:12)
This candle costs $24,000. It is an extremely rare Brazilian sandalwood. You literally have to go into the Amazon.
You know, you basically have to like, find extinct trees. No, bro, you got to tear out like two acres of rain forest. And then you find this one tree completely sacred. And then you chop it down.
You make this delicious.

**Jason Calacanis** (0:38)
You produce it and it lasts for a full 45 minutes.

**Chamath Palihapitiya** (0:42)
How do you like that sweater, Karen?

**Jason Calacanis** (0:44)
Candle Karen's are going to be calling it right now. The DMs are coming.

**David Friedberg** (0:50)
You guys want to hear about poker last night?

**Jason Calacanis** (0:52)
Oh, did you go?

**David Friedberg** (0:53)
So I go down, I take my eight hour drive down south to Chamath's house.
And I pull in and the security guard greets me nicely as always. I walk in and I walk towards the poker room. And everyone's in there with the door open like someone just got shot. Masks on, freaking out. And Chamath is inside the house. And I wave and he's like, get in here.

**Jason Calacanis** (1:16)
And then I go, oh, who was positive?

**David Friedberg** (1:19)
Max, the dealer, tested positive. And everyone's been hanging out in the poker room with no masks on.

**Jason Calacanis** (1:25)
Uh-oh.

**Chamath Palihapitiya** (1:26)
And so, you know, they're super spread out. The only two people that were exposed to Max we sent home.

**David Friedberg** (1:31)
Yeah. So everyone starts freaking out. Shuts the poker game down. Chamath kicks everyone out, sends everyone home.
And then he's like, all right, let's go have dinner inside. You know, we're not going to... We open up all the doors. We're going to kind of weisel the room tomorrow. We all go in and have dinner. Or, you know, Chamath and I go in and have dinner with Matt and the kids.
And then Chamath starts thinking, you know what? It's okay. They were only exposed for a few seconds. Let's call Phil back. Okay, let's call Schiphol back. Let's call Keating back. And then they all come back for dinner. And at this point, it's become like a dinner party. And then a couple of glasses of wine in. And then it's like, you know what? The room's probably safe.
I mean, the whole poker night went through the entire cycle of psychology of COVID.
The whole pandemic is like, oh, my God, get everyone out, lock up. And then by the end of the night, it was like, you know what? Let's go in the room and just play poker and give each other COVID.

**David Sacks** (2:21)
They got to acceptance.

**David Friedberg** (2:22)
They got to acceptance. They went through the whole emotional cycle of the pandemic in one hour.

**David Sacks** (2:26)
Does anyone know anyone who's a serious case of omicron?

**David Friedberg** (2:28)
No.

**David Sacks** (2:29)
I mean, I know dozens of people at this point, and they all say it was a cold.

**Jason Calacanis** (2:32)
Dozens of people. And that's just from your holiday party.

**David Sacks** (2:34)
Except for J Cal was on social media.

**Jason Calacanis** (2:36)
Except for your holiday party.

**David Sacks** (2:38)
J Cal was on social media giving everyone the update, like, oh, I sneeze today. Oh, I still test the positive. He's like showing his positive test.
And then he's doing that in his ski slopes.

**Jason Calacanis** (2:49)
My super fans, my stands were concerned.

**David Friedberg** (2:52)
It's the only good test result J Cal's ever had.

**Chamath Palihapitiya** (2:56)
It's the only positive, that's true.

**Jason Calacanis** (3:14)
Elizabeth Holmes has been found guilty on four counts of fraud, faces 20 years in prison for each guilty count, they would be, I understand, served concurrently. Most people I hear speculating four to ten years, and then I think you can get 15% off for good behavior. Again, I'm no expert on that, but that's what I read.
Guilty counts were two counts of wire fraud and two counts of conspiracy to commit fraud. She was originally charged with a total of 11 counts of fraud.
Four were guilty, four were not guilty, three were a split verdict. The jury said they were unable to come to a unanimous verdict on three of the counts after more than 45 hours of deliberation. Quote from the Wall Street Journal article, juries were persuaded that Ms. Holmes conspired to defraud investors. This outcome could be significant because it means hundreds of millions of dollars of Theranos investors, that Theranos investors' loss could be taken into consideration during her sentencing. It's big numbers. The jury was split, however, on which of the six investors who testified were defrauded. The jurors convicted Ms. Holmes on three counts. These included $100 million from the family office of former education secretary.