Hi Tom,
I'm afraid I do not share your optimistic assessment on the chances of a favorable ITC ruling. Patent infringement too dicey a game to predict. I am merely going on the assumption that you do not slash procedure fees 60% unless you expect competition to intensify. VISX cannot maintain their cozy US monopoly and they know it.
The good news is that market share erosion is already priced into the stock. I see little downside from here even with competition from Nidek and Sunrise. But the big winners here are the laser centers themselves and, of course, consumers.
There will be more choices of equipment, lower costs, and greater volumes of operations. The increased competition will keep everyone honest. VISX is so much further down the learning curve than its competitors that it will remain dominant unless an unforseen disruptive technology is introduced.
So I agree with your conclusion that VISX is a steal although I somewhat disagree with your premise. If they do happen to get a favorable ruling March 6, the stock will probably double overnight. I just don't think it's likely to unfold in such a convenient manner.
BTW, Tom, did you miss the action in VISX on the way down? I have considerable respect for your skill in playing the short side of a bull market, especially darlings like Ciena.
It is somewhat distressing for me to see you suddenly looking on the bright side of things. ;-)
Sam |
