{
  "docId": "019dd923-622c-750b-8b9a-2a2468219173",
  "docSlug": "ce565b841c40",
  "documentTitle": "Nevro Corp. (NVRO)",
  "authorId": "58_Scorpion_Capital",
  "authorName": "Kir Kahlon",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2021-01-07 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 196,
  "pageCount": 239,
  "prevPage": 195,
  "nextPage": 197,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 3,
  "notes": "Uses expert testimony to frame the company's business model as structurally flawed due to customer leverage.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "bullet_list",
    "quote_block",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b9a-2a2468219173/196",
  "deckHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173#slide-196",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "The ex-executive pointed to several factors that make it impossible to reverse price declines.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-3f3d-76db-b347-d1de695f8391",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.9,
        "x": 0.05,
        "y": 0.31
      },
      "kind": "list",
      "text": "He stated that Nevro’s dependence on ASC’s, which drive >70% of the company’s sales, drives price sensitivity as the discounts go straight to the doctors who owns the surgery centers.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "32ba3f11-55bf-47a8-b8d7-7f597370015a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.9,
        "x": 0.05,
        "y": 0.58
      },
      "kind": "list",
      "text": "The “whale customers” are ones that own their ASC’s, and given the small number of such accounts, stimulator companies fight over them by lowering prices.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "e89c7258-14de-496f-9fcd-17ee894f55a2",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.9,
        "x": 0.05,
        "y": 0.14
      },
      "kind": "paragraph",
      "text": "The ex-executive pointed to several factors that make it impossible to reverse price declines. First, the vast majority of Nevro’s revenue comes from ASC’s, which are personally owned by doctors who are therefore extremely price-sensitive.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ee46853c-8ea4-4f43-be95-e20aef45518f",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.86,
        "x": 0.09,
        "y": 0.66
      },
      "kind": "quote",
      "text": "And it’s a price war because none of the companies have created great customers... Every stimulator company is trying to fight over a couple of hundred customers a year that are up for play and they want a lower price.",
      "attrs": null,
      "subkind": "pull-quote",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "05223c17-cf1f-4a89-a087-3a2e055437f3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.86,
        "x": 0.09,
        "y": 0.38
      },
      "kind": "quote",
      "text": "The percentage of the business that comes from ASC’s is certainly over 70% on a national basis. The reason they’re so price-sensitive is that the physicians have ownership in that ASC or they own it outright... I pick up the extra $500,000.",
      "attrs": null,
      "subkind": "pull-quote",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "1450f2e3-db70-45d0-b88e-a2824ffec970",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "\"The percentage of the business that comes from ASC's is certainly over 70% on a national basis. The reason they're so price-sensitive is that the physicians have ownership in that ASC or they own it outright, so they're getting two fees. They're getting the facility fee. They get the physician fee and the equipment fee. As an example, if I can really knock you down on price, where I was paying $25,000 per stimulator before and now I'm paying $20,000 and I do a hundred cases a year, I pick up the extra $500,000. Then if I get reimbursed at $38,000, now I'm making $18,000 back on.\" — Nevro ex-executive; \"And it's a price war because none of the companies have created great customers. Those big whale customers that own their own ASC are making money off of the generator. Let's say as an example, Omnia is $5,000 more and you do a hundred cases a year. Are you really going to say it's a $500,000 better product than something else? Of course not. That money goes directly to the ASC owner who is the physician that does the cases. Every stimulator company is trying to fight over a couple of hundred customers a year that are up for play and they want a lower price.\" — Nevro ex-executive",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-3f3d-76db-b347-d6159120287a",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.2,
        "x": 0.05,
        "y": 0.96
      },
      "kind": "source-note",
      "text": "Source: Consultation calls with experts",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ee9b90a3-1029-4dc7-a0d7-b085a8fe5f89",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.9,
        "x": 0.05,
        "y": 0.09
      },
      "kind": "title",
      "text": "15. Pricing pressure and discounting are a key driver of Nevro’s collapse and doom any return to growth",
      "attrs": null,
      "subkind": "action-title",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "bae5f999-bd8a-4bc8-a930-a07292d56ef7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.35,
        "x": 0.05,
        "y": 0.04
      },
      "kind": "title",
      "text": "Scorpion Capital | Nevro (NYSE: NVRO)",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "585aeef0-bf4b-4238-845e-3a7a603d54f5",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "expose_contradiction",
      "slug": null,
      "matchId": "d626d2d2-b8c9-41ec-8c21-3e6af58ebefb",
      "evidence": "Uses expert testimony to highlight the structural conflict between physician-owned ASCs and Nevro's pricing power.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}