Did NuVasive Investors Miss the Writing on the Wall?

When NuVasive shocked Wall Street in late July by announcing that two of its top executives were leaving the company, analysts ultimately concluded that the changes were unexpected but would not be all that disruptive to NuVasive’s day-to-day business. Now, a report from short-seller GlassHouse Research suggests there is more to the turnover than meets the eye. GlassHouse said the abrupt departure of former Chief Operating Officer Jason Hannon and Chief Financial Officer Quentin Blackford indicates that the clock may be running out for NuVasive, and that the company has been fooling investors with accounting tricks. “Our analysts do not believe in coincidences at this scale and, based on our own expertise, we believe this will turn out badly for all involved at NuVasive,” wrote the authors of the 42-page GlassHouse report. The report accuses NuVasive of employing an “acquire-at-all-cost” strategy to achieve its $1 billion revenue goal for the year, and the researchers claim that this method will burn the company in the end. “Based on our own calculations, we believe that the core business is suffering greatly at [NuVasive] and is being masked by recent acquisitions,” the authors noted. Earlier this month, the San Diego, CA-based company reported the acquisition of Vertera Spine, but financial terms were not disclosed. Vertera develops interbody implants for spinal fusion using porous polyetherketone technology. NuVasive said the acquisition reflects the company...
Source: MDDI - Category: Medical Devices Authors: Tags: MD & M Minneapolis Medical Device Business Orthopedics Source Type: news