{ "docId": "019dd923-622c-750b-8b98-e0497bacd3c2", "docSlug": "44aa04154472", "documentTitle": "Align Technology, Inc. (ALGN)", "authorId": "54_Spruce_Point_Capital", "authorName": "Ben Axler", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2020-04-09 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 41, "pageCount": 84, "prevPage": 40, "nextPage": 42, "slideType": "preempt_rebuttal", "function": "preempt_rebuttal", "density": "overcrowded", "nDataPoints": 6, "notes": "Uses a combination of qualitative expert testimony and a quantitative 'materiality' table to build a bearish thesis.", "elementsJson": [ "headline_text", "paragraph", "callout_box", "quote_block", "data_table" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b98-e0497bacd3c2/41", "deckHref": "/decks/019dd923-622c-750b-8b98-e0497bacd3c2", "deckJsonHref": "/decks/019dd923-622c-750b-8b98-e0497bacd3c2.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b98-e0497bacd3c2#slide-41", "components": [ { "bbox": { "h": 0.15, "w": 0.2, "x": 0.78, "y": 0.75 }, "kind": "callout", "text": "Could 11.5% of Align's orthodontic case starts in the Americas be at risk to the loss of a single DSO customer?", "attrs": null, "subkind": "primary", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b16887e3-5f80-42ca-9bd7-539a1e3c0505", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "metric", "text": "DSO Group Share of Invisalign Orthodontist Cases: 11.5%", "attrs": null, "subkind": "primary", "toolName": "Quantification", "toolSlug": "quantification", "confidence": null, "componentId": "019dd953-0391-77f4-a9e7-7e5411167450", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.16 }, "kind": "paragraph", "text": "Spruce Point emphasizes that, while 3D printing centers are relatively new to the clear aligner space, the threat which they pose is not merely hypothetical...", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9b14ef6d-66ab-45ed-b69f-aafa56f42f2a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.45, "x": 0.52, "y": 0.41 }, "kind": "quote", "text": "There is a 50% chance that we move away from Invisalign when our contract comes up in 2020...", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1d1310c5-bf15-4dc7-b98d-b653800dcafb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.45, "x": 0.52, "y": 0.51 }, "kind": "quote", "text": "Invisalign case volume at DSOs is the biggest risk in the dentist channel. One big one that launches in house aligners... could have 50,000 annual cases at risk.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "b07d2b03-93a8-46ab-a29b-d019ee36bffb", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.45, "x": 0.05, "y": 0.41 }, "kind": "quote", "text": "You can setup a clear aligner FDA approved lab in less than a year. Your capital equipment costs... will be less than $200K.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "ee7e5ea5-530f-41c5-8f87-97740b6e08f2", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "\"You can setup a clear aligner FDA approved lab in less than a year. Your capital equipment costs between buying three [high-volume] 3D printers and thermoforming machines can be less than $100K to get started. If you add in labor, your total costs in your first year will be less than $200K.\" — Senior Employee, Major Dental Equipment Supplier; \"There is a 50% chance that we move away from Invisalign when our contract comes up in 2020 and for me to say that is a big deal. It's a really big deal. I personally have not been happy with the service for the last year and half.\" — Dentist, Top 10 DSO; \"Invisalign case volume at DSOs is the biggest risk in the dentist channel. One big one that launches in house aligners and it is going to be a huge loss. If you have 1,000 practices in your DSO, each dentist could easily be doing 50 Invisalign cases a year, so with just one DSO, you could have 50,000 annual cases at risk.\" — Dentist, Top 10 DSO; \"Our group has a committee looking to get a relationship with one of these [third-party labs] as our own print farm. They seem keen on one or two affiliated with carbon printers.\" — Orthodontist, Large DSO", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0391-77f4-a9e7-7a307e197b92", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.2, "w": 0.5, "x": 0.25, "y": 0.75 }, "kind": "table", "text": "Large DSO: Materiality to Align Case Volume table showing 11.5% share calculation.", "attrs": null, "subkind": "data", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "044a6167-98ac-45a4-8507-80ab199e16db", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.68, "x": 0.28, "y": 0.03 }, "kind": "title", "text": "Not Just Hypothetical: Major DSOs Considering 3D Printing Centers, Both In-Sourced And Outsourced", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "f1bc86e5-1100-4412-861e-8f51a1240766", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "preempt_rebuttal", "slug": null, "matchId": "b98b049f-6c71-4ba2-9645-62a033586519", "evidence": "Uses expert quotes and quantitative materiality to counter the argument that DSO 3D printing is hypothetical.", "confidence": 0.9 } ], "arcBeats": [ { "to": 84, "from": 41, "beatId": "422ae0e1-bf81-40de-97fd-5008b09953d5", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution (Provide relief)", "beatSlug": "problem-agitate-solution-solution-provide-relief", "evidence": "The document presents Spruce Point's short sell opinion and argues that the stock is poised for significant downside.", "position": 2, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [ { "to": 50, "from": 40, "name": "Mece Breakdown", "slug": "40-mece-breakdown", "bestFor": "Problem structuring, ensuring completeness, strategic analysis", "matchId": "8cb62e0c-7255-43bd-a985-20d6eb7e3ffa", "evidence": "The document presents a detailed analysis of the competitive threats and their impact on Align Technology's business model.", "position": 1, "objective": "How do the competitive threats impact Align Technology's business model?", "structure": "The Whole -> Category A (distinct) -> Category B (distinct) -> Category C (distinct) -> Complete Coverage", "confidence": 0.6, "description": "Divide a complex topic into mutually exclusive, collectively exhaustive categories" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }