We expect the company to put its 14.5 billion of net cash to work in pursuing acquisitions to accelerate growth. That said, we would not be surprised to see the shares trade sideways until a significant acquisition is announced.
More Quotes from Tao Levy:
The company continues to impress on its ability to protect the bottom line in the face of temporary slowdowns in one or more business segments.Tao Levy
We are somewhat surprised to see Guidant's board support Johnson Johnson's offer. Recall that this is the same company that thought Guidant was only worth 63 a few weeks ago. Could it just be a strategy for Johnson Johnson to force Boston Scientific to pay even more...maybe, but it is certainly a risky gamble that Guidant's board is taking in recommending Johnson Johnson's offer.
Tao Levy
The warning letter is a clear negative for Guidant and adds to its near-term challenges in its cardiac rhythm management franchise.
Tao Levy
It might give hospitals some more power to push back on prices.
Tao Levy
We would expect BSX to quickly come back with a new bid, but importantly, we do not expect management to increase its debt or offer more equity.
Tao Levy
As the offer size for Guidant increases and the relative value of its ICD business increases, we can't ignore the fact that at some point it might make sense for one of the two contenders to take a serious look at St. Jude Medical.
Tao Levy
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