Scuttlebutt on Google Maps

Derek Cheung of Honne Capital posted an intriguing presentation of Sientra (SIEN, $6.68) a couple months ago that prompted me to dive into the company. Long story short, Sientra sells breast implants which in the US is a triopoly (I may have made that word up, to clear up confusion: only three companies sell fake boobs). Sientra was buzzing along just fine until late 2015 when their third party manufacturer had some issues during a regulatory inspection. To add fuel to the fire, this manufacturer’s plant burned down shortly thereafter. In response, Sientra voluntarily halted all US sales of their breast implants, but it looks like they’ll be back selling again next month.

On October 28, Sientra held a conference call to discuss the above issues. Then-CEO Hani Zeini made a comment that the fire took place in building F2 which is where Sientra’s implants were produced. Another building, F1, was not affected and could potentially be modified for breast implant production. My first thought upon hearing this comment was, “What if F1’s capacity isn’t what F2’s was?” Sientra could have production bottlenecks for some time. And off I went to Google Maps in search of an answer.

I was able to find two pictures taken of the actual fire in action. The first one is below.

Next, I went to Google Maps street view to try and replicate the above picture angle. I eventually found where the picture was taken and below is a screenshot of the street view. The graffiti on the right wall has changed, but note the double telephone poles and the satellite on the roof of the house across the street.

The second picture I found of the fire (below) is from the adjacent street of where the first picture was taken.

Again, I went to street view and snapped the below screenshot. The above picture of the actual fire is a little higher (probably taken from a roof), but the below is the best angle I could get. Note the same house with the satellite on the roof and the tall radio tower in the background. Importantly, the building on fire, F2, is clearly a large silver or grey building that is taller than those surrounding it.

Silimed, the contract manufacturer, has several locations in Brazil but I was able to corroborate one of them and sure enough, it’s the large silver building below. I added arrows to the bottom left to show roughly where the two actual pictures of the fire were shot from.

Interestingly, if you go to that same view today, below is what you see.

The building is burned down! Amazing that Google has already updated it.

So what’s the point of this fun little exercise? The fact that Hani Zeini specifically mentioned F1 was not affected by the fire makes me think F1 is on the same grounds as F2. If F1 was one of Silimed’s separate locations in a different city, Zeini would have just said there’s another plant in another city that could potentially work, but he didn’t. The point is that in the above pictures you can see F2 is BY FAR the largest building on that property. There is no way F1 is even close to the same production capacity of F2. With that being said, Sientra has said they have a year’s worth of inventory in stock to hold them over while new production (F1) is figured out. From the above pictures, however, I’d say a production bottleneck is still very possible.

Now, the above is absolutely not a reason to buy or not buy Sientra. I haven’t done enough research to reach that decision yet. The point of this post is to illustrate how you can use Google Maps to aid an investment process. The above size of F1 (whichever building it is) compared to F2 is simply one small data point among all the others that should be used to analyze Sientra as a potential investment.