Insulet Dives After Dexcom Says it is Not in Merger Discussions By Investing.com

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Insulet Dives After Dexcom Says it is Not in Merger Discussions

Published May 31, 2022 11:50

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Insulet Dives After Dexcom Says it is Not in Merger Discussions

DXCM

-1.77%

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PODD

-2.64%

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By Sam Boughedda

Shares of insulin delivery device maker Insulet (NASDAQ:PODD) have tumbled 12% in early trading Tuesday following a statement from Dexcom (NASDAQ:DXCM) regarding rumors of a potential acquisition of the company.

Last Monday, Bloomberg reported Dexcom was in discussions to acquire Insulet, citing people familiar with the matter.

Dexcom, a company that produces glucose monitoring systems for diabetes management, has now refuted the reports, stating they are not in any discussions regarding a merger.

The company said it regularly reviews opportunities to enhance stockholder value and create benefits for customers, and it does not usually comment on speculation.

However, Dexcom released a statement, stating: "In light of recent sustained media and market speculation as well as the upcoming American Diabetes Association conference, we wish to confirm that Dexcom is not in active discussions regarding a merger transaction at this time."

Insulet shares hit a high of $238.60 in the days following Bloomberg's report but have dropped Tuesday, hitting a low of $199.56. Dexcom stock fell below $270 last week but is trading 6.5% higher in today's session.

Following Dexcom's press release, BTIG analyst Marie Thibault said, "DXCM shares had been pressured in the days following the Bloomberg report while PODD shares have surged. Shares have since reversed in pre-market trading and are near last Monday's close (Dexcom at $324.15 and PODD at $203.12). We expect shares to continue to be volatile in the coming days as investors digest this release ahead of this upcoming weekend's American Diabetes Association 82nd Scientific Sessions."

The analyst reiterated a Buy rating and a $540 price target on Dexcom.

Oppenheimer's Steven Lichtman is not surprised by the news, saying they questioned the fit. They see the companies benefiting from their connection through Omnipod 5 without having to be under one roof. Lichtman rates Dexcom at Outperform with a $525 target.

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