Again, those who think there is going to be a huge short squeeze here apparently don't realize that at least much if not most of that short interest is professional hedges to neutralize long positions in the event that EU remains dead for this company and the U.S. market saturation has no favorable resolution any time soon. Consider that without a huge surge in new orders for the equipment, the fat margin on these very expensive machines will be missing from this year's and forward revenue stream. So do they have 50 or so new orders in hand from the December Q budget cycle for hospitals in the U.S. or not? That is a very big question as the options dopes chase this up this week.
In those circumstances, go utilization and disposables revenues? Some are gaming that orders will be up hard and that systems sold this year will be up strongly... interesting bet given what has been happening here, the new device taxes, and the changes coming for surgery reimbursement under OBamacare.
Have any of the cheerleaders dissing our call to short this at $36 (on the way up last year) studied ISRG's dvp "procedure growth" of late? Seems they are having some problems trying to find people to use their machines for it here (reimbursement is part of the mix under coming rules and all that before the recent and very negative Citron publicity which goes to the heart of all "disruptive" medical technologies on various issues) and the EU is still a tough place to go for them -- and all device makers for that matter.
The move on earnings next week will likely be up hard or down hard... absent info, that is a lot like throwing dice as compared with rational risk taking. Fun to watch though -- from the sidelines with no position pending data needed to make an assessment other than our view this management team is in over its head, that is.
I think the earnings move has been mitigated by the pre-announcement of 15 units sold for Q4, resulting in 30 sold over the past two quarters. EU not a big part of MAKO's story and little emphasis has been placed on it. A long way to go there but encouraged that the first robotic assisted hip replacements ever performed outside the US took place recently in Italy using MAKO. This story is ongoing and won't be decided overnight. The pre-release of Q4's unit sales and procedure #'s now puts the emphasis on 2013 guidance and hip uptake. GLTA =)
I covered a lot of ground in that post above, but we agree that earnings for the last two quarters was/will be roughly in line with the units they knew they had locked down last Spring.
As my comments began in the thread, you and I agree the only thing that will let this stock stay about flat is marginal guidance of at least 50 systems for 2013. If they can't confidently do that, it will be a great indication that U.S. saturation is the reality, the EU will remain DOA/flatlined at next to none for the foreseeable future and so the stock is dead money at best.
If they have less systems to guide for the year? If they can only talk about orders for say half the 50 -- LOOK out BELOW! and get ready for another very dilutive secondary.
About a year ago management concluded their third weak call in three by saying "Trust us, we're going to get this done." They haven't made any progress adding orders since, so we willl find out next week. We may even get back to long if the news is good, gladly paying a few bucks more for the comfort ofknowing there is no near term $5 downside -- the uncertainty present going into the call.