Pj568

Boston Scientific Bundles Stents with Defibrillators and Ultrasound

I find it surprising that BSX is still regarded as a viable economic force. Their two primary business lines, CRM and Stents, continue to decline in a weak economy. Their balance sheet appears grossly distorted and unrealistic following the Guidant acquisition. They report 31B in assets with 15B in equity while the economic reality may be closer to a zero equity position. The failed overpriced acquisition plus decreasing sales from existing lines leaves them highly exposed to any misstep managing their existing working capital which probably can't be replaced without incurring highly expensive and dilutive events.

A simple indicator of an overpriced balance sheet value is that prior to the acquisition each dollar of net long term assets generated 1.10 in sales, post acquisition that number has fallen to 32 cents without any signs of recovery.

It seems incomprehensible that an impairment has not been recorded at anytime in the two years subsequent to acquisition. I wonder why markdowns in other sectors have yet to be realized here.