The company continues to impress on its ability to protect the bottom line in the face of temporary slowdowns in one or more business segments.

It might give hospitals some more power to push back on prices.

At a time when Boston Scientific management should be devoting 100 percent of its efforts to the Guidant transaction, it now also must address the warning letter.

The big question is whether hospitals will demand a price reduction on their supply costs. They might ask for it, but it doesn't mean they will necessarily get it.

As the offer size for Guidant increases and the relative value of its ICD business increases, we can't ignore the fact that at some point it might make sense for one of the two contenders to take a serious look at St. Jude Medical.

We expect the company to put its $14.5 billion of net cash to work in pursuing acquisitions to accelerate growth. That said, we would not be surprised to see the shares trade sideways until a significant acquisition is announced.

We find this very difficult to believe and would be buyers of ISRG on the weakness.

We are somewhat surprised to see Guidant's board support Johnson & Johnson's offer. Recall that this is the same company that thought Guidant was only worth $63 a few weeks ago. Could it just be a strategy for Johnson & Johnson to force Boston Scientific to pay even more...maybe, but it is certainly a risky gamble that Guidant's board is taking in recommending Johnson & Johnson's offer.

We would expect BSX to quickly come back with a new bid, but importantly, we do not expect management to increase its debt or offer more equity.

There is increasing chatter that when the in-patient payment system comes out in a couple of weeks, that it will be more controversial than we've seen in prior years.