First, let's talk about Theranos

Theranos voided two years of test results. The blood-testing company sent out “tens of thousands” of notices (paywall) to doctors and patients revising or invalidating tests, the Wall Street Journal reported. They include all results from Theranos’s Edison machine, which the company once claimed could detect a range of diseases from a single drop of blood.*

Now, let's talk about Monsanto

Bayer shares fell (again) on a Monsanto deal. Shares in the German chemicals giant fell 3% today on confirmation of Bayer’s $62-billion cash offer for Monsanto. If the deal is approved by regulators, it would create the world’s largest agribusiness—and would be the biggest corporate takeover ever by a German company.*

In both cases we are seeing companies that are having problems delivering in market, facing significant pressure from shareholders and/or regulators (assumed in the case of Theranos, but a safe one I think). In Theranos' case they're trying to go it alone. (Excuse me, they have added some advisory board members.) In Monsanto's, they've been off looking for a partner for quite a while (wasting the better part of a year chasing Syngenta when everyone knew that was never going anywhere). In Bayer, Monsanto's shareholders see the adult supervision, focus on high quality research and European focus that they want. Frankly, this is a great deal for Monsanto shareholders. 

Hilariously, I think they have both taken the strategy that the other should use. I would wish for Monsanto to break the back of the internal culture, get some outside advisors, change out 50% (or more) of senior leadership, build a product pipeline their customers want, and really focus on being properly value added to their customers. Conversely, I think Theranos should be acquired by a diagnostics company as soon as humanly possible to fix their organization, get some adult supervision into their technology and get it back into market in a trusted manner.

Why won't this happen? It's the same reason on both sides: Ego. Monsanto is convinced that they're a high quality full service product company. In reality they have a modestly effective commercial organization that has spent the last decade flailing around trying to recreate the lightening in the bottle that was the pairing of Round Up & GMO-based resistance to Round Up. Theranos has clearly drunk too much of their own kool aid and think that they're invincible and can make errors in the healthcare space without fallout (side note: 23andme is easily accused of the same thing in a worryingly similar parallel running afoul of the FDA). 

What does this mean? Bayer's shareholders need to decide if $62bn (gasp) is a good price for them to pay, if the debt assumption and loss of focus will be worth it (my $0.02 - for Monsanto it's great, probably not for the St. Louis job market however, for Bayer it is probably not going to be a big play). I do worry that this is Bayer's leadership feeling pushed aside in the face of BASF's ongoing and continued successes. For Theranos, they'll stumble along for another few years, hopefully surviving without having to raise too much more money or irritating the FDA any more and by 2019/2020 they might be in the market in a meaningful way.

In either case, I'm glad I'm not a shareholder in anyone mentioned in this article. But this should be a lesson to shareholders of both startups and public companies - Ego can be a killer. Bottle of wine says one or both is going to take a massive hit in the next 3 years.

* Both quotes are taken from QZ - Fantastic summaries.