Did the Livongo Acquisition Cause Teladoc’s Stock to Crash?

in Uncategorized

graph heading down

In August 2020 I posted about Teladoc’s acquisition of diabetes management company Livongo. My report was fairly neutral. At the end, however, I noted, “both companies’ stocks made it onto the markets’ Biggest Loser list on the day of the merger announcement, with Teladoc down 19% and Livongo off by 11% — the second and fourth biggest losers for the day, respectively.”

The Teladoc stock re-emerged as a Wall Street darling, rebounding to a high stock price of $293 in February 2021. Today, it closed at $29.77. 

Well, the entire stock market is down. But not by 90%. 

Some analysts (and, implicitly, Teladoc itself) pin Teladoc’s disappointing financials on Livongo — an exodus of Livongo employees (including leaders), disappointing program metrics, and product integration challenges.

I wouldn’t count Teladoc out, and some prominent investors and analysts are optimistic about the company’s future. But in an Axios article, Jim Kramer (sic?) is quoted:

“I’m not saying Livongo is worthless and Glen Tullman [Livongo co-founder] fooled Teladoc. I’m saying Livongo wasn’t worth near as much and Glen Tullman made a good deal.”

Teladoc and Livongo Merge

in business, Uncategorized

Merge Ahead signToday’s big news in the employee health industry is the merger of telemedicine company Teladoc Health and virtual disease management company Livongo. Both have been high flyers in 2020, with their revenues and their stock prices (Livongo just celebrated the one-year anniversary of its IPO and has been a Wall Street darling since then) skyrocketing. Each of the two  companies stock prices are up by more than 100% year-to-date.

Telemedicine has been all the rage among employee benefits directors for at least five years, but utilization remained lackluster until this year, when the COVID-19 pandemic radically accelerated consumer uptake.

Benefits of the merger include “joining two leaders in consumer behavior change,” according to a joint news release.

Speaking of behavior change, both companies’ stocks made it onto the markets’ Biggest Loser list on the day of the merger announcement, with Teladoc down 19% and Livongo off by 11%  —  the second and fourth biggest losers for the day, respectively.

Teladoc Health reaches agreement to buy Livongo in a $18.5 billion deal