Jim, Thanks v. much for URL, but there was a typo, it should have read: slackinc.com
I was surprised to read that the market is considered near-saturated. If so, then royalties will become even more important and, since these are split almost evenly b/n VISX and BEAM, it will become less important which company anyone owns. (For the record, a few days ago I invested roughly equal amounts in each.)
The market currently values BEAM at a discount to VISX. This seems reasonable given the legal mess the company is embroiled in, and currently they receive slightly less than half the royalties.
The article you brought to attention enlightened me concerning the Lens Express purchase. The data-base that came with the purchase allows the company to identify potential customers: those with myopia. VISX is, of course, relying on the opthalmic surgeons to do this themselves.
Not needing corrective lenses myself (yet), I have no feeling for the % of potential customers who have contact with opthamologists, or the % opthamologists' clients who could use the process. $600K is a lot to fork out for a machine that might only be useful for a minority of patients. With a high capital outlay, it makes sense to concentrate on just one service, laser-correction.
Thus, BEAM's strategy seems rational, if not their behaviour. The strategy will require more capital than that of VISX. I'm told they have $30m. I hope its not all blown in the lawsuits, and that a period of calm might reassure the market or banks should they need more.
Finally, (and again) I don't agree with others that a merger makes sense. If BEAM's strategy annoys the opthamologists, then so be it, they are gambling that they don't need the independents. If they were merged, then one company would suffer all the wrath. Currently, if the opthamologists boycott BEAM, then they buy VISX, and BEAM can laugh all the way to the bank with half (or almost) of the royalties. Personally I think this boycott concern is overdone, but if it's valid then it would be more serious for a merged company. |
