Why are investors assigning such a low value on a company with best in class technology, key partnerships with JNJ and EW, and over $30M in cash. The accumulated R&D is probably higher than the cap at this point. Am I missing something?
I think your posts are a breath of fresh air. Unfortunately I see another avenue for hostile take over than straight open market.
The stock and float are about 98% owned by institutional investors and mutual funds – a bunch of them. Who knows where the controlling interests of each of these holders lie?
It seems that a take over would be negotiated with a select group of the “disillusioned” institutional investors. Combined with the holdings of several smaller shell corporations, who’s to say that one or more of the likely suitors are not all ready close to a majority stake in DXCM?
DXCM has great IP, but they don’t have a business model. IMO It is just a matter of time before the mantle is passed to more capable stewards.
If JNJ or another entity were to attempt to acquire 50%, it would take over three months at the daily ave. volume. They would need to file once they hit 5%, which would trigger a tremendous rally to at least $10. So a stealth takeout is not possible.
They are F'd in the A. They are gonna have to raise some cash in the next quarter or two. They will be broke in 3-4. So either the company goes bankrupt or they issue more shares, further dilutiion. I think they got a shot a being successful, and by that I mean a cheap buyout target, All they have for BV is their IP. New "equipment" they got to increase manufacturing is just toxic debt for them because they will not reach profitability. Waiting till this gets closer to a $1 before I buy. But that would be pure speculation on a buyout of their IP.
The key here is not future dilution but what is the value of the IP. Presumably a stock that has gone from $8 to $2 in a hurry is factoring in some dilution. So, to arrive at a likely acquisition target, what is the value?
Were investors several months ago really anticipating much more in the way of operating results? If so, I think they were buying a dream rather than reality.
Look at the transcript from the conference call.
Okay, so it's just coming off of it. And then as we look obviously the capital markets are challenging these days and congratulations on the deal with Edwards. It gives you some more cash in the bank. I mean, just looking at what you started with, and what you have added and what your current burn is, you have probably somewhere at the current burn, even when you start dropping it down a little about three to four quarters of cash. What's the strategy at this point to when you get to the end of '09 and into 2010 to bolster the balance sheet?
That's a great question. Obviously we are in constant communication with our Board of Directors on that, Bill. And at this point I would have to defer any discussion. The Board has asked us not to comment on that.
There are a number of other public small medical device firms in the same boat. The technology dosen't matter anymore if the only thing in sight is more dilution and no profitability... (however, I would not be surprized if there an acquisition attempt at this level)