Thread by @StockJabber

Something seems off at STAAR Surgical $STAA

1) Questionable large customer (~50% of revenue)
2) Multiple SEC comment letters
3) Changes in revenue recognition
4) Lots of management turnover

Let's explore (thread)

STAAR's largest customer is Shanghai Lansheng, a Chinese distributor.

Shanghai Lansheng accounts for ~50% of STAAR’s revenue, up from 15% in 2015, but STAAR almost never mentions them.

In its 10-K STAAR even misspells the name of its largest customer "LanGsheng"

The SEC also seems skeptical about STAAR and has sent the company multiple comment letters concerning a Warning Letter from the FDA, the company’s Swiss defined benefit plan, loss contingency accrual for litigation, and sales to a distributor in Syria.

STAAR also changed its revenue recognition policy.

2017: "recognizes revenue when arrangement exists; delivery occurred; the sale price is determinable; collectability is assured.”

2018: "recognizes revenue when contractual performance obligations with customers are satisfied.”

This is not the only accounting change is recent years @StorkResearch highlighted more changes in a report that alleged the company may be channel stuffing.

STAAR’s SEC correspondence and changes in revenue recognition have been managed by four different CFOs in the last five years.

The company's auditor is BDO.

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Also, go check out @JCap_Research and their work on STAAR if you are interested in the name. They recently put out an interesting report.