Citron Updates Arthrocare


“If you rely on analysts for the prognosis, investors had better to seek a second opinion”

After the sharp downturn in Arthrocare last week, its analyst/cheerleader decided to keep their head in the sand and defend the company with the blanket logic on the theme of “management disagrees with a short seller”. The most interesting of all the defenses was that of Piper Jaffray who not only attempted to discredit Citron but also went on in saying that their internal research did not have the company using or suggesting any improper codes. Time to do more research.

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Credibility is like virginity; once you lose it, you can never get it back.


Arthrocare like you’ve never seen it before:  A business model exposed by its own documents.

Under a cloud of gathering suspicion about the actual nature of its business, Arthrocare has had 3 opportunities over the last three weeks to get their story straight.  The first was the Jan 3 conference call dealing with the acquisition of Discocare; the next was the Jan 8 Needham Growth Stock Conference, and most recently the Jan 18 Bear Stearns conference call.  In each case, management has outright lied to investors and analysts about key topics relating to the company’s core business model and its future business prospects.  Something is disturbingly wrong here and it extends way beyond the spine business. Read more

Citron Research exposes yet another secret subsidiary operating in the shadows at Arthrocare.


“Oh What a Tangled Web We Weave When First We Practice To Deceive”
Sir Walter Scott

In our last report, Citron Research presented a historical record of the Arthrocare CEO pulling the wool over investors’ eyes.

On January 18th, 2007 Arthrocare held a conference call with Bear Stearns with the intention of clearing up the issues surrounding the Discocare acquisition. We now observe history repeating itself – Mr. Baker is up to his old tricks again. Read more

Citron comments on Arthrocare (NASDAQ:ARTC)’s acquisition of Discocare: Trying Put the Genie Back in the Bottle


Last week medical device maker Arthrocare purchased Discocare, an entity they refer to as a “third party billing company”. While analysts superficially cheered the move, Citron has decided to look deeper into this unholy alliance with a most nefarious business partner. Management has attempted to spin the story as acquiring a third party biller that possesses a special “algorithm” to get insurance approvals. Citron believes that Arthrocare purchased Discocare to cover up a relationship that is predicated on fraud and deception. Read more