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  "documentTitle": "Nevro Corp. (NVRO)",
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  "authorName": "Kir Kahlon",
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  "presentationDate": "2021-01-07 00:00:00",
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  "notes": "The slide uses a testimonial to debunk the 'take-out' thesis, framing the company as a 'one-trick pony' in a 'price war'.",
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      "text": "Nevro is now boxed \"into a corner\" and will \"die of a thousand cuts.\"",
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      "text": "A substantial part of Nevro’s stock rise has been fueled by investor hopes of a take-out, with the sell-side sainting Grossman as a quick-flip magician. We asked longtime executives in the space for their opinions of potential acquirers, and contrast investor fantasy with realism from a former Nevro executive who bluntly dismissed the company’s appeal to potential buyers. We note his dismissive opinion of Stryker, speculated upon as the most logical savior, even at a $2B valuation (~$58/share or 1/3 the current stock price). He stated that Nevro’s value as a “one-trick pony” is now diminished because it’s a “commodity business” in a “price war”; that any acquirers would rather buy new, smaller stimulator entrants; that J&J was a major investor in Nevro yet never bought them; and that large acquirers with an interest in the stimulator space, such as Medtronic and Abbott, are instead paying “absolute pennies on the dollar” for emerging, inexpensive stimulator companies. He added that Nevro is now boxed “into a corner” and will “die of a thousand cuts.”",
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      "text": "Stryker is fantastic at buying really inexpensive crummy companies, so for them to think about buying a $2, $3, or $4 billion dollar company like Nevro, I don’t see it. I just don’t. I don’t think it’s in the culture. I don’t think it’s who they are. When Nevro stock was down in the $30’s and low $40’s, that would have been a great m&a target but now it’s an incredibly expensive platform. If another technology comes up and beats them, it’s really not worth much. All the other stim companies are scaling bigger and they have more options for doctors. Nevro is still pretty much a one-trick pony. They’re going to cut costs to shore up the bleeding, so they’re not going to pay reps $350,000. They’re going to pay $185,000 and you’ll see low-quality reps.",
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      "text": "If this is going to be a price war, it’s going to be a commodity business. Medtronic just did an acquisition of Stimgenics for pennies. Absolute pennies on the dollar. Medtronic can buy anything they want, yet they chose to buy one of the low-cost new stimulator companies out there, because the clinical data looks good. Abbott bought DRG for pennies on the dollar and they’ve never made money off of it. So when you look at the dollars that it would take to acquire Nevro, who would it be? J&J was one of the original investors in Nevro and they never bought it. So I don’t see a Stryker acquisition for sure. And you’ve got a bunch of other companies that are trying to figure out how to get in the space, so I personally don’t see it. Nevro has boxed themselves into a corner and now they’ll die of a thousand cuts.” – Former Nevro executive",
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      "text": "\"Stryker is fantastic at buying really inexpensive crummy companies, so for them to think about buying a $2, $3, or $4 billion dollar company like Nevro, I don't see it. I just don't. I don't think it's in the culture. I don't think it's who they are. When Nevro stock was down in the $30's and low $40's, that would have been a great m&a target but now it's an incredibly expensive platform. If another technology comes up and beats them, it's really not worth much. All the other stim companies are scaling bigger and they have more options for doctors. Nevro is still pretty much a one-trick pony. They're going to have to cut costs to shore up the bleeding, so they're not going to pay reps $350,000. They're going to pay $185,000 and you'll see low-quality reps.\" — Former Nevro executive",
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      "text": "Source: Consultation calls with experts",
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      "text": "13. Investor hopes of a Nevro acquisition are delusional and misinformed",
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      "text": "Scorpion Capital | Nevro (NYSE: NVRO)",
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