VOLC - Volcano Corp

[BG2008]

Volcano Corp is interesting because it is a medical device company with 60+% gross margin.  It is likely worth a lot more in the hand of a larger competitor who can more efficiently sell the product.  SG&A expenses are high, past capital allocation strategies are terrible...  The depressed share prices are likely due to bad management rather than bad products.  Engaged Capital owns 5.1% of the company and has gone hostile.  They sent a scathing letter on Sep 29th to be board asking the board to sell the company

 

http://www.sec.gov/Archives/edgar/data/1354217/000141588914002939/ex991to13da109455003_092914.pdf

 

Later on Camber takes a 9.8% position in Volcano. Together the two firms owns roughly 15% of the company. 

 

The company will likely get sold or capital allocation will become a lot more disciplined.  Anyone on the board knows a thing or two about intravascular ultrasound or fractional flow reserve products? Any heart surgeons who puts stents in patients?   

 

Volcano Corporation (Volcano) designs, develops, manufactures and commercializes a range of precision guided therapy tools, including intravascular ultrasound (IVUS), and fractional flow reserve (FFR), products. The Company is facilitating the adoption of functional percutaneous interventional (PCI), in which its FFR technology is used to determine whether or not a stent is necessary, and IVUS is used to guide stent placement and optimization. It markets its products to physicians and technicians who perform PCI procedures in hospitals and to other personnel who make purchasing decisions on behalf of hospitals. Its products consist of multi-modality consoles, which are marketed as stand-alone units or as customized units that can be integrated into a range of hospital-based interventional surgical suites called catheterization laboratories (cath labs). In June 2014, Volcano Corp acquired the entire share capital of AtheroMed Inc. 

[krazeenyc]

Congratulations!!

 

http://finance.yahoo.com/news/philips-buy-medical-device-maker-062742273.html

 

[BG2008]

Yeah, this was a nice gift to wake up to this morning with it's 55% move from yesterday.  Wish I could've understood the business better from a doctor's standpoint, would've like to size the position a bit bigger.