Steel Partners Holdings revealed on Wednesday its intention to acquire a controlling interest in InMode Ltd. (NASDAQ: INMD), submitting an unsolicited proposal to purchase 51% of the company’s outstanding shares at a price of $18 per share. This offer equates to a 29% premium relative to InMode's closing price on January 23, prior to speculation about a potential transaction. Steel Partners currently owns approximately 800,000 shares of InMode, representing about 1.3% ownership.
In a detailed letter accompanying its proposal, Steel Partners criticized InMode's stock performance, citing total shareholder returns of negative 19.18% over the past year, negative 59.35% over three years, and negative 53.24% over five years. The letter also underscored concerns about InMode’s capital allocation policies, particularly the decision to retain roughly $532.3 million in cash—nearly half of its market capitalization—while maintaining a debt-free balance sheet as of its third-quarter 2025 financial report. Steel Partners contends that this approach has not translated into consistent, value-enhancing returns for shareholders.
Additionally, the investor highlighted the company’s frequent downward adjustments to financial guidance, noting seven instances of lowered guidance in the last nine quarters. Most recently, InMode trimmed the upper limits of its 2025 revenue and non-GAAP gross margin forecasts. Precise projections provided include preliminary fourth-quarter sales estimated between $103.60 million and $103.80 million, compared to analyst consensus of $104.44 million. The firm narrowed its fiscal 2025 sales estimate from a range of $365 million to $375 million down to $370.2 million to $370.4 million, marginally below the consensus estimate of $370.55 million. Furthermore, its fiscal 2026 sales forecast of $365 million to $375 million falls short of the Wall Street estimate of $384.47 million.
Steel Partners affirmed that its acquisition proposal is premised on a thorough evaluation of InMode’s business fundamentals and growth prospects, emphasizing that the transaction would be financed entirely via existing cash reserves and available borrowing capacity, without contingencies tied to financing. The firm expressed openness to engage in dialogue with InMode’s management team; however, it noted that previous attempts to discuss the proposal privately have not been reciprocated.
Should discussions with leadership stall, Steel Partners indicated a readiness to initiate a binding offer directly with shareholders. At latest check, InMode’s stock price increased by 5.82%, trading at $16 per share, indicating positive market reaction to the announcement.
The situation places a spotlight on potential strategic shifts for InMode, particularly regarding shareholder returns and capital deployment, amidst a backdrop of stock underperformance and ongoing adjustments to revenue outlooks.