{ "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": 204, "pageCount": 239, "prevPage": 203, "nextPage": 205, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses direct quotes from former employees to support the thesis of fraudulent market growth reporting.", "elementsJson": [ "headline_text", "paragraph", "quote_block", "footnote" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-2a2468219173/204", "deckHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-2a2468219173#slide-204", "components": [ { "bbox": null, "kind": "callout", "text": "A second Nevro ex-employee, who was involved in the market growth calculations the company represented to investors and the sell-side, basically admitted to us that it was a fraudulent exercise.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-3f3d-76db-b34a-a36efcd18a0d", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.88, "x": 0.06, "y": 0.13 }, "kind": "paragraph", "text": "Reimbursement pressure undermines the SCS market growth narrative that has been a key part of the bull case ever since Nevro went public in 2015. A former Nevro territory manager implied that the narrative was fabricated to get the stock up. A second Nevro ex-employee, who was involved in the market growth calculations the company represented to investors and the sell-side, basically admitted to us that it was a fraudulent exercise. We show the ex-employee's explanation below and note its incoherence and absurdity, in response to our bluntly asking if the company was fabricating a growth number for investors and Wall Street.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5d3c136a-9a5d-4f09-b191-399df0e3113b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.88, "x": 0.06, "y": 0.51 }, "kind": "paragraph", "text": "Question: Were data sources being cherry-picked to reinforce a narrative, a market growth number that the stock required, just to be blunt?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "65125eba-5b99-437d-9981-27d209c1af1f", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.88, "x": 0.06, "y": 0.31 }, "kind": "quote", "text": "Market analysts look at the spinal cord stimulation market as a bigger growing market than it actually is. I believe it has been inflated. In order to get a stock up, you need to show that a market is at a certain growth level. That's my belief. It's my solid, firm belief, and it's because I've been dealing with these same patients and doctors for 25 years. The market for the number of new implants is not growing as fast as what investors are being told. That's my belief.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "aaaef250-f160-436f-a411-b3647de961fe", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.88, "x": 0.06, "y": 0.56 }, "kind": "quote", "text": "Umm...probably to a degree, right? I don't...you know... I think some of the data sources weren't always the full picture that they needed to be. I wouldn't say picking and choosing perhaps but there was, which I'm sure happens in all kinds of angles sort of leaning more heavily on data that maybe people thought supported a narrative and then, to some degree, sure. So, I think, again, it was a triangulation of different data sources, right? The payer data. I mean, I would say the payer data, Wall Street and analysts and other physician market research, and you know, I think...I don't know how would I characterize it. I think it was—I don't know. I think at a specific point that you were referring to, I think—I don't know. I think there were different times where different data sources were weighed more heavily and I think that weighing of different data sources was at times skewed.", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d5f886f9-a6ce-43b8-a6d8-e61052cc5aa6", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "I believe it has been inflated. In order to get a stock up, you need to show that a market is at a certain growth level. That's my belief. It's my solid, firm belief, and it's because I've been dealing with these same patients and doctors for 25 years. The market for the number of new implants is not growing as fast as what investors are being told. That's my belief. — Former Nevro territory manager; Umm...probably to a degree, right? I don't...you know... I think some of the data sources weren't always the full picture that they needed to be. I wouldn't say picking and choosing perhaps but there was, which I'm sure happens in all kinds of angles sort of leaning more heavily on data that maybe people thought supported a narrative and then, to some degree, sure. So, I think, again, it was a triangulation of different data sources, right? The payer data. I mean, I would say the payer data, Wall Street and analysts and other physician market research, and you know, I think...I don't know how would I characterize it. I think it was—I don't know. I think at a specific point that you were referring to, I think—I don't know. I think there were different times where different data sources were weighed more heavily and I think that weighing of different data sources was at times skewed. — Former Nevro employee involved in calculating market growth figures", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-3f3d-76db-b34a-a5eab430c254", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.2, "x": 0.06, "y": 0.96 }, "kind": "source-note", "text": "Source: Consultation calls with experts", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3930fe40-f0a3-4eed-94c5-447a514d1d45", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.88, "x": 0.06, "y": 0.09 }, "kind": "title", "text": "16. The SCS market growth story fueled by Wall Street is false and undermined by escalating payor backlash", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "2da90748-574c-4331-b231-dd56d6af49b0", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.4, "x": 0.06, "y": 0.04 }, "kind": "title", "text": "Scorpion Capital | Nevro (NYSE: NVRO)", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "deb43a4a-c501-4ad7-95b9-da413709dd8a", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "fraud-exposure", "slug": null, "matchId": "87267cde-ac51-44ec-9eaa-245a59b48a86", "evidence": "The slide explicitly frames the narrative as a 'fraudulent exercise' and uses expert testimony to expose the contradiction between public growth claims and internal reality.", "confidence": 0.9 } ], "arcBeats": [], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }