Let's put this BSX Minnesota Divisional R&D wizard on ignore.
5,000 SCIMED people and their revenue per emp is $300,000.
ANYONE in the medical device world would love that number.
Persistent imagining that JNJ would bid for BSX just doesn't pass logical muster. JN J is already the 900 pound gorilla of the device industry and any further accretion invites intervention from the reg people (FTC).
Better to look deeper at earnings and other BSX moves. The whisper of 8 cents doesn't sound good.
I'm compelled to agree that a short here is very dangerous. However, talk of mergers etc. is a bit overblown.
This push up today has some legs.
Step back and take a breath. Long slides rarely change directions simply due to a round number apparent floor ($5).
As for take overs by JNJ? Such things are intricate in nature and mortals like us never get clues––doubly so for the "Analysts" of the healthcare sector.
You might want to double down because BSX is a good firm...just not yet good enough. But 2012 will be a good year.
I like your reasoned approach. It tends to foil those with Bull Horns. I also agree that BSX is due for a rise back towards the $6 level (But I'd sell before getting there).
The general market certainly is levitating against negative media stories out of Europe.
Of course this person is a short and you are correct to cut him off. His "Burning Cash" headline mimics a "Shock & Awe" move but simply is not true. The CORDIS win alone represents a good boost in coming quarters for BSX.
I appreciate your accurate views here. Elliott has done a decent job of righting the BSX ship. It appears he can yet be an effective director from the Board as well.
The idea that JNJ would buy BSX was a non-starter. JNJ is already far too large for that scenario.
And you are correct that the Mahoney Move is odd at best––Even Elliott used the word "Peculiar" in his recent conference call. No, JNJ isn't a friend of BSX at all.
Alone the FTC would have difficulty pushing the anti trust engine but together with another agency, working behind the scenes a divestiture reduction at JNJ can be done.
The point here is that monopolies are generally urged to "lose weight" over time and Mahoney's transition has the look and feel of such a move.
The final issue is my hobby horse: Massive under-utilization and production plant redundancy in the device space of the medical field. This means inescapable consolidation.
I see your view as quite reasonable and implying a conciliation between behemoths however, that isn't a Path of Least Resistance analysis.
The more likely explanation isn't a voluntary cooperation but a mandated management divestiture to competitor BSX due to JNJ's obvious monopoly status––that got even bigger BTW with the recent acquisition of SYNTHYS. $70 Billion in revenue dwarfs everyone else.
Indeed, internal development statements from JNJ may be a simple acknowledgment that JNJ isn't going to get any bigger. In other words, JNJ is out of the acquisition mode––which is something regulators might ask Caruso to do.
Supporting ma453, there are certain personal issues (Excellent R&D at BSX) that compel a strong defense––if for no other reason than to set records straight. BSX has much to offer and remains a clean buy.
Growth necessitates change. Quality R&D often promulgates that change and BSX has always led their peers in revenue per employee ($300,000). So layoffs may be an example of GOOD R&D coming online soon.