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Insulet Corporation (PODD) Message Board

  • hwardeinhorn hwardeinhorn Jan 5, 2008 7:47 AM Flag

    Pricey dicey

    if the share price here..were to start moving firmly northward.. .. without any news to support it...I might suspect that they are in negotiations to be bought by a bigger fish..That likely will happen..but when?????..diabetes doc and small time investor

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Hward,
      You're an endicrinologist?

      Do you have patients that wear the Omnipod?

      In which region do you practice?

      Can you readily get Omnipods for your pateints?


      -Sector

    • Would someone want to acquire PODD at this stage? I've been struggling with that question for a while.

      On the one hand, at $600 million market cap, the stock is trading at almost 10x 2009 expected revenues and it will be several quarters until it reaches profitability. Investors obviously love the story and have priced the stock with an incredibly rich valuation, looking past and almost ignoring the execution risk that lies ahead as PODD continues to transition from development stage to commercialization. Does an acquirer want to pay a premium to an already super rich valuation with so much execution risk ahead?

      On the other hand, a rational argument can be made that Medtronic and the other conventional pump guys don't want some upstart invading their turf and destroying their conventional pump business. And no competitor wants the other to acquire PODD's innovative technology. And a $1 billion acquisition is almost a rounding error for someone as large as MDT.

      The prudent thing would be for an acquirer to wait until the execution risk passes and then acquire PODD, in like 2-3 years. But by waiting, a potential acquirer takes the risk that someone else buys them first. It�s really a dilemma.

      I finally come down on the side that the technology is disruptive enough, and potentially damaging enough to conventional technologies, that someone will probably throw my valuation and execution risk considerations aside and acquire PODD sooner rather than later.

      • 1 Reply to Bentley97
      • Bentley..consider also...extra-time before a big player buys this and accelerates the awareness of this new technology..allows extra time for copy-cat technology....which I presume will occur...a big player could promote this far more aggressively..I wasn't kidding..I had to teach our Endo about this..and she's generally up to date!!!

    • I think that a buyout is imminent. According to a Insulet employee that I know the company keeps an open door policy in meeting with potential suitors.

      At this point the differences between MiniMed, Animas, Cozmo, even Accu-Chek Spirit are not that significant. They are splitting hairs. But then enter OmniPod. It is obviously different and for many a significantly better option.

 
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