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  "documentTitle": "Stryker Corp. (SYK)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "presentationDate": "2022-04-06 00:00:00",
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  "notes": "The slide uses two side-by-side tables to highlight a discrepancy between reported accounting figures and estimated acquisition-based figures.",
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      "text": "Spruce Point observes that Stryker has recorded in its income statement $419 million of inventory sold that was stepped-up to fair value since 2017. Stryker passes this through as a “non-cash” cost add-back to improve gross margins. However, after reviewing Stryker’s recent and large public company acquisition targets, Spruce Point estimates just $268m of inventory that was stepped-up. The step ups are very large in relation to the final inventory amount reported by the acquired public target.",
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      "text": "Spruce Point observes that Stryker has recorded in its income statement $419 million of inventory sold that was stepped-up to fair value since 2017. Stryker passes this through as a \"non-cash\" cost add-back to improve gross margins.",
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      "text": "inventory step-up: $419 million",
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      "text": "Source: Target company and Stryker SEC filings. Note: Other acquired inventories that can be accounted for as minimal include OrthoSpace ($1m) and Mobius ($7m) per Stryker valuation reporting and TSO3 ($3.3m) and Invuity ($8.5m) per their last public filings.",
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      "text": "Inventory Step-Up Recorded Through Stryker’s Income Statement",
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      "text": "Warning: M&A Inventory Step-Up Charges Exceed What We Can Account For",
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