DOMA Perpetual Sends Letter Urging Board of Directors of InMode Ltd. to Resume Share Repurchase Program
DOMA Perpetual Capital Management, a significant stockholder of InMode Ltd. (NYSE: INMD), has sent a letter to the company's Board of Directors demanding two major actions: the immediate resumption of the share repurchase program and the removal of CEO Moshe Mizrahy. The letter criticizes Mizrahy's leadership, citing his misunderstanding of buybacks, poor financial performance, and questionable management decisions.
The investor highlights that InMode currently holds approximately 60% of its market cap in cash ($500 million), with no debt and strong free cash flow exceeding $100 million. With a market cap of just $875 million, DOMA argues the company is severely undervalued, considering its assets include global distribution, extensive installed base, unique IP, and the Morpheus8 brand, while maintaining 80% gross margins.
DOMA Perpetual Capital Management, un importante azionista di InMode Ltd. (NYSE: INMD), ha inviato una lettera al Consiglio di Amministrazione della società chiedendo due azioni principali: la ripresa immediata del programma di riacquisto di azioni e la rimozione del CEO Moshe Mizrahy. Nella lettera si critica la leadership di Mizrahy, evidenziando la sua incomprensione riguardo ai riacquisti, le scarse performance finanziarie e decisioni manageriali discutibili.
L'investitore sottolinea che InMode detiene attualmente circa il 60% della sua capitalizzazione di mercato in contanti (500 milioni di dollari), senza debiti e con un forte flusso di cassa libero superiore a 100 milioni di dollari. Con una capitalizzazione di mercato di soli 875 milioni di dollari, DOMA sostiene che la società sia fortemente sottovalutata, considerando che i suoi asset includono una distribuzione globale, una vasta base installata, proprietà intellettuali uniche e il marchio Morpheus8, mantenendo al contempo margini lordi dell’80%.
DOMA Perpetual Capital Management, un accionista importante de InMode Ltd. (NYSE: INMD), ha enviado una carta al Consejo de Administración de la compañía exigiendo dos acciones principales: la reanudación inmediata del programa de recompra de acciones y la destitución del CEO Moshe Mizrahy. La carta critica el liderazgo de Mizrahy, señalando su falta de comprensión sobre las recompras, el bajo rendimiento financiero y decisiones gerenciales cuestionables.
El inversor destaca que InMode actualmente posee aproximadamente el 60% de su capitalización de mercado en efectivo (500 millones de dólares), sin deuda y con un fuerte flujo de caja libre que supera los 100 millones de dólares. Con una capitalización de mercado de solo 875 millones de dólares, DOMA argumenta que la compañía está gravemente infravalorada, considerando que sus activos incluyen distribución global, una extensa base instalada, propiedad intelectual única y la marca Morpheus8, manteniendo al mismo tiempo un margen bruto del 80%.
DOMA Perpetual Capital Management는 InMode Ltd. (NYSE: INMD)의 주요 주주로서 회사 이사회에 두 가지 주요 조치를 요구하는 서한을 보냈습니다: 주식 환매 프로그램의 즉각적인 재개와 CEO 모세 미즈라히의 해임입니다. 이 서한은 미즈라히의 리더십을 비판하며, 환매에 대한 오해, 부진한 재무 성과, 그리고 의심스러운 경영 결정을 지적하고 있습니다.
투자자는 InMode가 현재 시가총액의 약 60%에 해당하는 현금(5억 달러)을 보유하고 있으며, 부채가 없고 1억 달러가 넘는 강력한 자유현금흐름을 가지고 있다고 강조합니다. 시가총액이 단 8억 7,500만 달러인 상황에서, DOMA는 글로벌 유통망, 광범위한 설치 기반, 독특한 지적 재산권(IP), Morpheus8 브랜드를 포함한 자산을 고려할 때 회사가 심각하게 저평가되어 있다고 주장하며 80%의 높은 총이익률을 유지하고 있다고 평가합니다.
DOMA Perpetual Capital Management, un actionnaire important de InMode Ltd. (NYSE: INMD), a adressé une lettre au conseil d'administration de la société exigeant deux mesures majeures : la reprise immédiate du programme de rachat d'actions et le départ du PDG Moshe Mizrahy. La lettre critique la direction de Mizrahy, évoquant sa mauvaise compréhension des rachats d'actions, des performances financières médiocres et des décisions de gestion discutables.
L'investisseur souligne qu'InMode détient actuellement environ 60 % de sa capitalisation boursière en liquidités (500 millions de dollars), sans dette et avec un flux de trésorerie disponible solide dépassant les 100 millions de dollars. Avec une capitalisation boursière de seulement 875 millions de dollars, DOMA affirme que la société est fortement sous-évaluée, compte tenu de ses actifs comprenant une distribution mondiale, une large base installée, une propriété intellectuelle unique et la marque Morpheus8, tout en maintenant des marges brutes de 80 %.
DOMA Perpetual Capital Management, ein bedeutender Aktionär von InMode Ltd. (NYSE: INMD), hat einen Brief an den Vorstand des Unternehmens gesendet, in dem zwei wesentliche Maßnahmen gefordert werden: die sofortige Wiederaufnahme des Aktienrückkaufprogramms und die Abberufung des CEO Moshe Mizrahy. In dem Schreiben wird Mizrahys Führung kritisiert, insbesondere seine Missverständnisse bezüglich Rückkäufen, schlechte finanzielle Leistung und fragwürdige Managemententscheidungen.
Der Investor hebt hervor, dass InMode derzeit etwa 60 % seiner Marktkapitalisierung in bar hält (500 Millionen US-Dollar), keine Schulden hat und einen starken freien Cashflow von über 100 Millionen US-Dollar aufweist. Mit einer Marktkapitalisierung von nur 875 Millionen US-Dollar argumentiert DOMA, dass das Unternehmen stark unterbewertet ist, wenn man die Vermögenswerte wie globale Vertriebsnetze, eine umfangreiche installierte Basis, einzigartige geistige Eigentumsrechte und die Marke Morpheus8 berücksichtigt, während gleichzeitig 80 % Bruttomargen aufrechterhalten werden.
- Company has strong financials with $500 million in cash and no debt
- Generates over $100 million in free cash flow
- Maintains high gross margins of nearly 80%
- Owns valuable assets including global distribution network, installed base, and IP
- CEO has lowered guidance almost every quarter since Q3 2023
- Stock price continues to decline under current management
- US business is underperforming after firing US Head of Sales
- Management's previous M&A attempts have all failed
- CEO's public statements about buybacks have potentially damaged investor confidence
Insights
Activist investor DOMA is pressuring InMode's board to resume buybacks and replace CEO Mizrahy, citing poor leadership and financial performance.
This letter from significant shareholder DOMA Perpetual represents a classic activist campaign targeting both capital allocation strategy and leadership change. The activist's primary contentions are twofold: first, that InMode should resume its previously announced share repurchase program given the company's substantial cash position (approximately
What's particularly notable is DOMA's criticism of Mizrahy's public statements regarding buybacks, where he reportedly questioned their effectiveness after the stock price continued declining despite
The letter highlights several specific management critiques: consistently lowered guidance since Q3 2023, the untimely firing of the US Head of Sales, resistance to moving production outside Israel to reduce risks and costs, and failure to raise prices on key products like Morpheus8. These operational criticisms strengthen DOMA's case beyond just financial engineering through buybacks.
This activist pressure creates a governance crossroads for InMode's board, who must now evaluate their fiduciary responsibility to all shareholders. With the stock apparently trading at only
Believes the Board Should Immediately Resume and Accelerate Buybacks
Asserts Board Should Remove Moshe Mizrahy as CEO of the Company
The letter can be downloaded here
The full text of the letter follows:
May 9th, 2025
To the Board Members of InMode:
For over a year, we have communicated publicly and privately with the Board of Directors of InMode (the "Board") about our concerns regarding the Company's capital allocation strategy and depressed valuation, with particular attention to the negative public statements and actions of CEO Moshe Mizrahy. During this period, InMode's stock price has continued to decline and Mr. Mizrahy's underperformance is clearly reflected in the Company's financials. Furthermore, we believe his reckless and antagonistic management style as CEO has gone unchecked.
Following Mr. Mizrahy's most recent comments, we are compelled to underscore the danger of allowing him to make financially uninformed public statements regarding capital allocation. In discussing recent buybacks, he said: "Now, actually from an investment point of view of the company, we actually invested
These remarks are both incorrect and damaging. The purpose and value of these buybacks is not in moving the short-term stock price, it is in creating long-term value for shareholders. We believe InMode's depressed stock price is a direct result of Mr. Mizrahy's dismal leadership and poor performance as CEO, which is further reflected in the financials of the Company.ii
Mr. Mizrahy's incorrect and misleading public commentary on how buybacks are meant to work, alongside his continued lack of financial results, are driving down the price of the Company's stock.iii We will not speculate on Mr. Mizrahy motivations, but InMode's shareholders are suffering because of his words and actions as CEO. The Board, in its legal and fiduciary duty to represent all investors, must take action on their behalf.
In our view, the Board should immediately resume the Share Repurchase Program and "substantial additional capital return" announced in Februaryiv, and the Board should remove Moshe Mizrahy from his position as the CEO of the Company.
Whether or not Mr. Mizrahy understands how buybacks are meant to work, we expect the members of this Board to possess the financial literacy to know the value they can add to shareholders. The Board must work to immediately remedy the situation, restating the Company's commitment to returning the cash on the balance sheet to its owners: the shareholders.
InMode's buybacks should be resumed immediately; the Company's stock price remains a bargain due to continued mismanagement and Mr. Mizrahy's harmful public remarks. Cash sitting on the balance sheet produces no earnings and no shareholder return. Management's prior attempts at M&A have all failed. The value that is created from executing buybacks now will come to fruition when a new CEO steps in to manage the business and earnings acceleration resumes. The lower the Company's stock price and valuation, the more aggressive the Board should be returning the cash to shareholders in the form of buybacks. As the Company buys back its own stock, it is impossible to pick the bottom – what matters is to continue the buybacks as long as the price remains attractive. The Company currently holds approximately
Mr. Mizrahy has lowered guidance almost every quarter since Q3 2023vi. He chose to fire the US Head of Sales –InMode's largest market – right before the Company's most important quarter.vii It should be no surprise that the US business is underperforming. In a recent letter to DOMA, Mr. Mizrahy refused to consider moving a portion of production outside of
In our opinion, the Company must take action to protect the brand, including Morpheus8. It is a mistake to not increase prices, which the market should bear. Lowering margins hurts shareholders.
As of May 7th, InMode's market capitalization – discounting the approximately
The Board's legal and fiduciary duties to its shareholders require it to act in the face of a depressed valuation and persistent underperformance. We believe the business and its shareholders will be best served by removing Mr. Mizrahy from his position and reinstating and accelerating the share buyback program.
Sincerely,
Pedro Escudero
CEO & CIO
DOMA Perpetual Capital Management LLC
About DOMA Perpetual Capital Management LLC:
DOMA Perpetual Capital Management LLC is an asset management firm based in
Contact:
DOMA Perpetual Capital Management LLC
ir@domaperpetual.com
Disclaimer
This letter has been prepared by DOMA Perpetual Management LLC and its affiliates ("DOMA"). The views expressed herein reflect the opinions of DOMA and are based on publicly available information with respect to InMode Ltd. ("InMode, Ltd." or the "Company"). DOMA recognizes that there may be confidential information in the possession of the Company that could lead it or others to disagree with DOMA's conclusions. DOMA reserves the right to change or modify any of such views or opinions at any time and for any reason and expressly disclaims any obligation to correct, update, or revise the information contained herein or to otherwise provide any additional materials.
For the avoidance of doubt, this press release was not produced by any person that is affiliated with InMode Ltd., nor was its content endorsed by InMode Ltd. This press release is provided merely as information and is not intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy any security nor as a recommendation to purchase or sell any security. One or more funds managed by DOMA currently beneficially owns shares of the Company.
Some of the materials in this press release contain forward-looking statements. All statements contained herein that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words "anticipate," "believe," "expect," "potential," "could," "opportunity," "estimate," "plan," "once again," "achieve," and similar expressions are generally intended to identify forward-looking statements. The projected results and statements contained herein that are not historical facts are based on DOMA's current expectations, speak only as of the date of these materials and involve risks, uncertainties and other factors that may cause actual results, performances or achievements to be materially different from any future results, performances or achievements expressed or implied by such projected results and statements. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of DOMA.
i InMode Q1 2025 Earnings Call Transcript
ii InMode Company Filings, DOMA Perpetual Internal Calculations
iii InMode Earnings and Conference Call Transcripts:
Q3 2023 Earnings Call "One, our previous experience with buyback. Actually, we did buyback for
Oppenheimer 34th Annual Healthcare MedTech & Services Conference (03/12/24) "One thing we don't want to do is a buy back. We prefer to do dividend if that will be the, I would say, the solution so everybody will enjoy with some money." - Moshe Mizrahy
Canaccord Genuity MedTech, Diagnostics and Digital Health & Services Forum (11/18/22) "We spent
iv https://www.prnewswire.com/news-releases/inmode-reports-fourth-quarter-and-full-year-2024-financial-results-board-of-directors-has-approved-a-new-share-repurchase-program-302366770.html
v InMode Company Filings, DOMA Perpetual Internal Calculations, Market Cap is calculated as the shares outstanding as of April 28th 2025, net of share repurchases announced by the Company, and a stock price as of May 7th.
vi InMode Company Filings, DOMA Perpetual Internal Calculations
vii https://www.prnewswire.com/news-releases/inmode-announces-departures-of-president-of-north-america-chief-medical-officer-and-vp-of-sales-usa-as-part-of-a-global-reorganization-strategy-302263201.html
viii https://www.prnewswire.com/news-releases/inmode-responds-to-doma-perpetuals-letters-302393786.html
ix Database of medical device manufacturers registered with FDA:
https://www.accessdata.fda.gov/scrIpts/cdrh/cfdocs/cfrl/rl.cfm?start_search=1&establishmentName=®Num=&StateName=&CountryName=DO&RegistrationNumber=&OwnerOperatorNumber=&OwnerOperatorName=&ProductCode=&DeviceName=&ProprietaryName=&establishmentType=5&pagenum=100
https://www.accessdata.fda.gov/scrIpts/cdrh/cfdocs/cfrl/rl.cfm?start_search=1&establishmentName=®Num=&StateName=&CountryName=CR&RegistrationNumber=&OwnerOperatorNumber=&OwnerOperatorName=&ProductCode=&DeviceName=&ProprietaryName=&establishmentType=5&pagenum=100
x InMode Company Filings, DOMA Perpetual Internal Calculations, Market Cap is calculated as the shares outstanding as of April 28th 2025, net of share repurchases announced by the Company, and a stock price as of May 7th.
xi Bloomberg Database, InMode Company Filings
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SOURCE DOMA Perpetual
FAQ
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