PODD - stevehemingway/trading GitHub Wiki

theworks(legal,blue-orca-capital,{

Blue Orca is Short Insulet Corporation (NASDAQ: PODD) and Long EOFlow Co. Ltd. (KOSDAQ: A294090)

We are short Insulet Corporation (the “Company” or “Insulet”), the world’s leading manufacturer of insulin delivery patch pumps, and long its upstart Korean competitor EOFlow Co. Ltd. (KOSDAQ: A294090), because undisclosed to investors, last week the Court of Appeals for the Federal Circuit killed a preliminary injunction that protected Insulet’s key monopoly against competition from EOFlow. The appellate court decision instantly restores EOFlow’s business from court-induced purgatory, clears the path for Medtronic (or another industry heavyweight) to acquire EOFlow, and shatters Insulet’s U.S. monopoly on tubeless automated insulin delivery (“AID”) systems.   Incredibly, not only have investors and analysts not noticed this highly material legal defeat, but Insulet, to our knowledge, has failed to disclose this material event to investors despite ample opportunity to do so on its recent earnings call, in an 8-K or in its newly issued 10-Q. Insulet bragged about winning the preliminary injunction on a prior earnings call, meaning it should have been equally forthright about its defeat on the Q1 2024 earnings call, held two days after the ruling. In our opinion, it is highly misleading for Insulet to conceal from investors that the appellate court killed the very injunction which protected its competitive moat and was so material to its stock that, when the injunction was granted, its market capitalization gained $1.8 billion. This injunction is now dead. Competition is here.   This presents a massive asymmetric opportunity for investors. As to Insulet, we anticipate an immediate 15%+ drop in share price as the stock reverses the gains it made upon the granting of the injunction and as investors awaken to the restoration of an imminent competitive threat to Insulet’s flagship product monopoly. As to EOFlow, the appellate court order gives an immediate lifeline to a desperate business, permitting not only EOFlow to once again sell competing tubeless patch pumps but to reengage with potential acquirors, like Medtronic, who are eager to aggressively challenge Insulet’s valuable monopoly. Prior to Insulet’s complaint, EOFlow shares traded at KRW ~28,500. Following the injunction, EOFlow shares traded to a low of KRW 3,390 in February 2024, meaning that investors could see a ~600% gain if, as we expect, EOFlow recovers to its pre-injunction price.}, Insulet Corp.,medical devices,{https://www.blueorcacapital.com/report/blue-orca-is-short-insulet-corporation-and-long-eoflow-co-ltd/})