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No. of Recommendations: 17
My investment in Livongo came prior to my fully understanding the entire market it is serving but understanding just enough that I made my usual large entrance at an opportune moment. This thread has been very helpful. The CGM market, considered a threat, is likely more akin to IBM as a threat to MSFT in the early years. The more IBM PCs sold, the more the SAM increased for MSFT.

LVGO is not Microsoft, nor DXCM IBM, but the analogy is apt. IBM PCs were of little use without software. Microsoft created this value for IBM. Meanwhile Microsoft OS was of little value without IBM putting out their boxes and pushing it to more and more markets. Synergy at its finest. Yet there was fear that IBM would simply disinter mediate Microsoft at will. I mean DOS is really a crappy piece of software not all that complicated...

DXCM, with the modern age way of business competition thinking, is focusing on its core product, and identifying what enhances the value of their product. Livongo has been specifically mentioned at least 2x on this thread by DXCM. As Livongo adds value to what can be done with the DXCM product, so DXCM creates additional boxes that Livongo can reach customers on. Synergy.

It is important to understand these things unless you think everything a CGM does is a threat to the business instead of what it appears to be, a real and growing opportunity and Dexcom and Abbott and the like will push to continually expand this market as well. Livongo is clearly the leading provider of value add services to CGM devices in the United States. Perhaps it will remain so as CGM products push internationally as well.

Anyway, I found this some valuable insight that although grossly overvalued (as is most things we invest in) perhaps quite undervalued if that synergy exists, if CGM companies do expand the market, and if what Livongo does is grow in competitive power as their access to data grows (as we are told happens with AI. So often that is marketing talk, but sometimes it actually is a fact directly on the mark).

Tinker
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