Image source: TransEnterix.
What: Following rumors that Johnson & Johnson (JNJ 0.05%) may consider acquiring it, shares in TransEnterix (ASXC 1.48%) soared by 33% at 1:00 p.m. ET.
So what: TranEnterix, is a tiny maker of surgical devices that hopes to challenge much larger robotic surgery Goliath Intuitive Surgical (ISRG -1.93%) someday.
The company is developing robotic devices that can assist in minimally invasive surgery, and its plans include a potential U.S. launch of SurgiBot in the second quarter of this year, and a launch of ALF-X in various countries that accept the CE Mark of approval.
Because Johnson & Johnson has a large medical device division that's seen its sales flat-line, its management has indicated plans to restructure and conduct M&A, and it's already announced a collaboration to work with Alphabet (GOOG -1.80%) on robotic surgical devices, investors are speculating that TransEnterix could be on the company's wish list.
Now what: Trafficking in rumors is a sure-fire way to come up on the losing end of an investment, so investors may want to shy away from putting too much stock in the validity of this report.
Nevertheless, investors may want to add TransEnterix's to their watchlist and track its progress, because the company did recently hire former Intuitive Surgical sales leaders to spearhead their commercialization efforts, and the market is big and growing. For example, Intuitive Surgical sales increased 12% to $2.38 billion in 2015.
Overall, while there's a market opportunity that makes this company interesting, the fact that TransEnterix doesn't have any revenue yet and it still loses money makes me content to key an eye on it, rather than jump in and buy shares on this pop.
