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Insulet Corporation (PODD) Message Board

  • bebonan35 bebonan35 Jun 10, 2008 3:09 PM Flag

    Cash Flow

    So if Insulet had $70M in cash the end of first quarter 08 with a $20M per quarter burn rate why do they need to borrow $60M? Their CFO stated during the last conference call Insulet would have a positive cash flow by fourh quarter 2008. They only have $20M in outstanding loans. Are they planning on buying something?

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    • So if you were concerned about cash flow before and Insulet has resolved the issue are you now a buyer of Insulet?

      • 1 Reply to bebonan35
      • Not a buyer. A couple of concerns have popped up recently that I want to get comfortable with.

        First, the VP of business development recently resigned, so I want to hear what they have to say about that on the next conference call. Seems odd for a business development guy of a fast growing company to leave if things are going well. They'll spin it as positively as possible, but I still want to hear what they have to say.

        Also, as someone else pointed out in a previous post, an emerging competitor, Medingo, raised $27 million from its parent company late last year. That demonstrates a very high level of confidence in Medingo. Based only on the Medingo web site, it sounds like their solution is even smaller and more discreet than PODD's, so I want to see how things develop there.

        I'm going to keep following PODD and listening to conference calls, but I'm not in a hurry to buy. I'd rather buy at a higher price if I'm more confident the company is on track and I better understand the competitive environment.

    • They needed to raise cash. They are projecting they'll be cash flow break even by Q4, but that's just a projection and things can go wrong. But even if they meet that goal, they would still have needed to do a capital raise to continue to add new manufacturing lines. I was actually relieved they did this convert deal. It's less dilution than selling common stock outright, which most likely would have been priced at a discount to market.

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