Poor Baby
It seems that Tandem (NASDAQ; TNDM) CEO Kim Blickenstaff isn’t a happy camper. Kim is upset over the things we’ve been writing recently thinking we’re some sort of bully. Now this is somewhat understandable but as we’ve said before when you run a publicly traded company if you want a friend get a dog. By our way of thinking public scrutiny of a CEO’s job performance comes with the territory. This as they say is why they make the big bucks and as we outlined yesterday Kim is certainly making the big bucks.
Yet what we didn’t quite understand is why Kin felt it necessary to send an email which contained a 10-year chart for Dexcom (NASDAQ: DXCM). And just what did this chart reveal? From April 19, 2008 to today shares of Dexcom are up 839.92% while shares of Tandem over that same time frame are DOWN 89.33%. To wit we say thank you Kim for proving our point. Dexcom has created shareholder value over the past 10 years while Tandem has destroyed shareholder value over the same time frame.
Now we have not looked up what Terry Gregg the former CEO of Dexcom or what Kevin Sayer the current CEO of Dexcom have made over the past 10 years but whatever they have earned we don’t think shareholders mind one bit. Listen over that same time frame the NASDAQ index is up 179.81%, Insulet (NASDAQ: PODD) is up 355.28%, Medtronic (NYSE: MDT) up 55.40%. Put simply compared to their peer group Tandem hasn’t done very well.
Since Kim holds Dexcom in high esteem as do we let’s look at what Dexcom hasn’t done over those 10 years. They did not create a situation which placed the company on death’s doorstep. They did not create a situation which forced the company to dilute their stock. They did not spend money recklessly. Did Dexcom make mistakes absolutely. Their mishandling of the Libre being the most recent.
But unlike Tandem, Dexcom recognized their mistakes and have taken steps to correct them. All Tandem has done is raise more capital they have yet to fix the structural problems they face. Listen before the last Tandem dilution everyone and we mean everyone came in and looked. Given the dismal state of their finances back then many thought they could come in and buy Tandem on the cheap. Yet even at fire sale prices there were no offers therefore forcing the company into the last major dilution.
Yes, shares of Tandem have been a roll recently but this recent upswing does not wash away the sins of the past. The company must now execute in a very difficult and ultra-competitive market. As we noted yesterday the one thing the company has never done is execute. What boggles our mind is that investors seem to have forgotten all the past sins as if they never existed.
Yesterday we compared Tandem and Kim to the Cleveland Browns a team that hasn’t had a winning season since 2007. Their head coach who has a .031 winning percentage is making somewhere near $4 million bucks a year. The Vegas oddsmakers believe the Browns will win less than 5 games this upcoming season. By way of comparison look at the New England Patriots a team which has not had a losing season since 2000 and who’s coach is reportedly making around $8 million a year. With their talent and track record its understandable why Vegas has the Patriots at 6 to 1 to win the Superbowl.
Yet given the way investors are acting you’d think they would rather bet on the Browns over the Patriots to win the Superbowl. That they’d rather have Hue Jackson as their coach over Bill Belichick. Most importantly they seem to believe the Browns have better talent than the Patriots.
So just where are we going with this other than upsetting Browns fans and reminding everyone that the Patriots as much as they are hated are damn good. It’s called a commitment to winning which ultimately is why we respect the Patriots owner Robert Kraft as winning does not happen by accident. We do not lay all the blame for Tandem’s issue on the shoulders of Kin Blickenstaff. We have no problem with him accepting his generous compensation package. No, the real culprits here are the company’s board of directors.
This Board sat and did nothing while Kim was running the company into the ground. They lavished Kim with a generous compensation package. They basically let him do whatever he wanted without holding him accountable. Now that the shares have been rolling of late they say see we were right to keep Kim and while we’re at it let’s give him a raise. Never mind his complete track record lets focus like good little boys and girls on the short-term.
Listen even the Browns changed coaches 5 times since 2008. And to all the Browns fans we’ll offer hope in the way of the Chicago Cubs who after 108 years did win a World Series and is now one of the best teams in baseball. We just hope for your sake it doesn’t take 108 years for your beloved Browns to win a Superbowl.
So, Kim thanks for helping us prove our point by sending the Dexcom chart. Go ahead and cry all you want as you are crying all the way to the bank. And people wonder why we’re as mad as hell.
