DexCom, Inc. (DXCM): A Bear Case Theory

Core Viewpoint - The investigation by Hunterbrook Media highlights significant safety, operational, and financial concerns regarding DexCom, Inc.'s G7 continuous glucose monitor, indicating a decline in the company's reputation and potential risks to patient health [2][5]. Financial Performance - DexCom's share price was $65.41 as of October 15th, with trailing and forward P/E ratios of 46.79 and 25.64 respectively [1]. - Financial indicators suggest deteriorating fundamentals, including a surge in days sales outstanding and a doubling of work-in-process inventory, raising concerns about revenue recognition practices [4]. Product Issues - The G7 sensor's performance has been compromised due to a secret alteration of a key component, leading to underperformance in accuracy metrics and resulting in the FDA classifying the device as "adulterated" [2][3]. - Users have reported serious inaccuracies, leading to hospitalizations and fatalities, including a case linked to a device failure [2][3]. Corporate Culture and Management - Former employees have criticized the corporate culture for prioritizing profit margins over safety, with inadequate technical oversight and rushed design decisions to compete with Abbott's Freestyle Libre 3 [3]. - There are indications of systemic issues within the company, evidenced by executive departures, insider sales, and repeated product recalls [4]. Competitive Landscape - DexCom faces increasing competition from Abbott's superior devices and potential changes in Medicare policies, which could threaten its market share [4]. - The company's own initiatives, such as the Stelo device, are also experiencing accuracy problems and legal challenges [4].