What Happened?
Shares of medical lens company STAAR Surgical (NASDAQ:STAA) jumped 45.6% in the afternoon session after eye-care company Alcon announced a definitive agreement to acquire the company in an all-cash deal valued at approximately $1.5 billion. Under the terms of the deal, Alcon paid $28 in cash for each share of STAAR Surgical. This price marked a 51% premium to the company's closing stock price on the previous day. STAAR Surgical manufactured implantable lenses for vision correction, including its EVO family of Implantable Collamer® Lenses. The acquisition allowed Alcon to absorb a key player in the ophthalmic surgery space.
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What Is The Market Telling Us
STAAR Surgical’s shares are very volatile and have had 29 moves greater than 5% over the last year. But moves this big are rare even for STAAR Surgical and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 3.2% on the news that industry bellwether UnitedHealth Group (UNH) slashed its 2025 profit forecast after reporting a significant surge in medical costs, sending shockwaves across the health insurance sector. The core of the issue stems from an “unprecedented medical cost trend environment,” particularly within the Medicare Advantage market, which are privately run versions of the federal health insurance program. UnitedHealth, the largest provider in this space, now expects these costs to rise by 7.5% in 2025, a significant jump from its earlier 5% projection, with the potential to accelerate to almost 10% in 2026. In response, the insurer announced it will drop plans covering over 600,000 people. The company's lowered earnings forecast has raised investor concerns that these surging costs and utilization rates are an industry-wide problem, impacting the profitability of other carriers as well.
STAAR Surgical is up 12.2% since the beginning of the year, but at $27.04 per share, it is still trading 33% below its 52-week high of $40.36 from August 2024. Investors who bought $1,000 worth of STAAR Surgical’s shares 5 years ago would now be looking at an investment worth $437.39.
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