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| Intuitive Surgical has doubled the size of its share repurchase program to alleviate worries over da Vinci sales and safety.--Courtesy of Intuitive Surgical |
Intuitive Surgical ($ISRG) has watched its stock price tank by more than 30% since February, when safety concerns about its da Vinci robots stunned investors, alarmed regulators and intrigued attorneys. Now the California device outfit is doubling its share repurchase program, approving a $1.5 billion plan aimed to stabilize its stock.
The company is setting aside another $779 million to buy its own shares, adding to the roughly $721 million still in its coffers from a previous repurchase program, Intuitive said. About $500 million of that total is earmarked for Goldman Sachs and its shares of Intuitive common stock, part of an accelerated repurchase program expected to close in two weeks, according to the company.
Intuitive CEO Gary Guthart said in a statement that the effort "demonstrates our commitment to our shareholders as well as our confidence in the da Vinci surgical system and the benefits it brings to patients."
Of course, whether shareholders value that commitment or share that confidence remains to be seen. It's been a long year for Intuitive on the Street, starting with concerns about da Vinci's safety and followed by physician scorn, declining sales, mounting lawsuits and FDA warnings, with each step met by a decline in stock value.
This month, Intuitive revealed that it received an FDA warning letter over how it reported adverse events related to da Vinci, and, last quarter, sales of the once-vaunted robots declined 6% year-over-year and 27% in the U.S. alone.
Intuitive's share price tanked nearly 14% on news of the warning letter and about 15% when preliminary sales figures came out in early July, reflecting how skittish market-watchers have become about a company that was once a sure-fire source of cash flow and steady growth.
The company has risen about 3.2% since the buyback announcement, trading at $395 premarket Tuesday morning.
- read Intuitive's announcement