DexCom: Stock Plunge After Critical Report

Shares of the medical device manufacturer DexCom experienced a 7.4% drop in the morning after a report by Hunterbrook Capital criticized the company. The short-seller exposed issues with the G7 glucose monitor, questioned DexCom's accounting, and pointed to executive departures. The report claimed that complaints about the G7 device led to the formation of a Facebook group with over 58,000 members. Hunterbrook noted that some doctors no longer prescribed the G7 due to 'disproportionate measurement inaccuracies, repeated device failures, connection problems, and issues with the adhesive.' Concerns were also raised regarding DexCom's accountability and aggressive tactics to surpass second-quarter earnings expectations. Compounding the situation was the unexpected departure of long-time CEO Kevin Sayer. Hunterbrook Capital confirmed that it holds a short position in DexCom shares. Market turbulence often provides opportunities for investors to acquire high-quality stocks at a discount. The question remains whether now is the right time to invest in DexCom. DexCom's stock has shown some volatility in the past, with 14 price movements over 5% in the last year. Today's drop highlights the significance of the recent news, although the overall picture of the company is not fundamentally altered. Most recently, the stock experienced a positive move of 0.4% four days ago when new product features and positive clinical data were announced at the upcoming EASD conference. DexCom plans to introduce the new 'Smart Basal' module to improve basal insulin management, along with additional data on the efficacy of its continuous glucose monitor. Since the beginning of the year, DexCom's stock has fallen by 12.1% and is trading at $69.01 per share, 24% below the 52-week high of $90.75. An investor who had invested $1,000 in DexCom five years ago would see a value of $704.69 today.