September 29, 2011
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of NuVasive (Nasdaq: NUVA ) slumped more than 11% in early trading before closing down 8%. Investors apparently didn’t like the terms of an $80 million bid to acquire Impulse Monitoring.
So what: Color me unsurprised. While the beginning of the press release is long on hyperbole -- calling it a "strategic foray" into an $800 million market -- the announcement closes with the sad news that the deal will be immediately dilutive ($40 million of the purchase price will be paid in stock) yet won't offer any earnings upside before 2012.
Now what: To be fair, NuVasive is making a longer-term bet on the need for less-invasive spinal surgery, and Impulse Monitoring's technology could induce doctors to try the company's products. Meanwhile, Intuitive Surgical (Nasdaq: ISRG ) and MAKO Surgical (Nasdaq: MAKO ) have paved the way for using tech intelligence in conducting sensitive surgeries. Is that enough to get you to buy shares of NuVasive? Please weigh in using the comments box below.
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