Half a year, a huge loss of more than 60 billion yuan, what pits did the Internet medical originator step on?

As the originator of the United States and even the global Internet medical care, TELADOC, founded in 2002, was the first remote medical platform in the United States. It was listed on the NYSE in 2015. It is the first official remote medical company to be officially listed. Medical "living fossils". TELADOC is the benchmark of the United States Internet Medicine. It has always led the development trend of Internet medical care. It is also the target of many Internet medical companies in China.

However, since 2022, TELADOC's performance is surprising: its second quarter financial report shows that the quarterly loss of $ 3 billion, plus the $ 6.67 billion in the first quarter, TELADOC has suffered a huge loss of nearly $ 10 billion in half a year. It is equivalent to more than 60 billion yuan, and its market value has evaporated by nearly 90%compared to last year's historical high.

This number is surprising. What happened to TELADOC, who has always performed well? More importantly, what pits did it step on?

With the takeoff of the epidemic, create Internet medical myths

TELADOC, who is regarded as the originator of Internet medical, has been performing well since its listing, and its business has maintained a high -speed growth trend. It has maintained a high growth rate from 2015 to 2018.

TELADOC's income and increase before the years before the new crown epidemic

The fast -growing business, coupled with the optimism of the prospects of Internet medical care, supports TELADOC's stock price. Its stock price is still in the range of $ 10-20 in 2016. In the second half of 2017, its stock price has stabilized above $ 30. In 2018, the stock price entered a range of $ 50-70.

The new crown pneumonia in early 2020 was a typical "black swan" incident. However, this has led to an increase in the number of Internet medical demand in the United States, making TELADOC optimistic about a large number of investors, and the stock price has soared all the way, drawing a stunning steep curve.

At the beginning of 2020, TELADOC's stock price was still hovering around $ 80. By the time of the year, the stock price had skyrocketed to $ 190. By February 2021, TELADOC's stock price reached $ 294.54, creating the highest peak since its listing.

TELADOC's stock price curve chart in the past 5 years (screenshot from the official website of Nasdaq)

Use adjectives such as "hot" and "redness and purple" to describe the time of TELADOC at the time.

Since the first quarter of 2020, TELADOC's revenue and users have shown a surge. In the fourth quarter of 2019, TELADOC's total revenue, the number of domestic members and the total number of domestic members visited was $ 156.5 million, 36.7 million (people) and 980,000 (times). Compared with previous quarters, it is a relatively normal growth.

In the first quarter of 2020, the three indicators reached 180.8 million US dollars, 43 million (people) and 1.51 million (times). In the second quarter, the three indicators further soared to US $ 241 million, 51.5 million (people) and 2.11 million (times). The growth rate is evident.

2019-2020 TELADOC quarterly key indicators comparison (unit: millions of dollars/millions/million times)

In 2020, TELADOC achieved a revenue of US $ 1.094 billion, an increase of 97.7%over the previous year; in 2021, it increased by 85.8%on the basis of 2020, achieving a revenue of US $ 2.033 billion.

In August 2020, TELADOC acquired Livongo, which has just been launched for a year. The diabetic management star company established in 2008 was listed on the IPO in 2019. The main business is to use digital technology and intelligent devices to help diabetic patients manage the condition.

According to the trading terms, the Livongo shares held by Livongo's shareholders will receive 0.592 TELADOC shares and $ 11.33 cash. Based on this calculation, Livongo's valuation will reach $ 18.5 billion. According to the estimation of the financial service company PIPER Sandler at the time, the merged new company valuation was as high as $ 38 billion.

After the acquisition of Livongo, TELADOC's service covers almost every business field of remote diagnosis and treatment. At this time, the situation of TELADOC is good, and no one can stop it from moving forward.

The unexpected time of "Dark Moment"

In April 2022, TELADOC announced the first quarter financial report, with a huge loss of $ 6.67 billion, the market was uproar, and investors rushed to escape. Its stock price dived from $ 55.99 to $ 33.51, a significant plunge of 40%, and the market value evaporated by half. Many investors call it the "dark moment" of TELADOC for 7 years.

Investors who were angry because of the heavy losses even brought TELADOC to court through a collective lawsuit. In this lawsuit, investors have accused TELADOC of failing to disclose "intensified competition and how other factors have had a negative impact on TELADOC's Betterhelp and chronic care business" and "how the growth of these businesses is not as sustainable as the defendant guides investors to believe in. "". Investors believe that these misleading have led to unrealistic financial predictions for TELADOC's fiscal year. According to the lawsuit, TELADOC predicted that the annual revenue in 2022 could reach US $ 25.265 billion before the February financial report was released, and the revenue after adjustment was 3.355 million US dollars. However, the first quarter of the first quarter of April showed that its first quarter revenue was US $ 565.4 million, although higher than the same period last year, the difference between 3.23 million US dollars was expected. Based on this, the company's annual revenue forecast for 2022 was reduced to $ 2.4-2.5 billion.

TELADOC spokesman responded in an email statement: "There is no factual basis for lawsuits, but unfortunately, this boring lawsuit has become commonplace among today's listed companies."

Investors' anger is unreasonable. TELADOC is very optimistic about the first quarter and annual performance forecasts in the first quarter and year of 2022 in 2021. It is expected that in the first quarter of 2022, the loss will only lose up to $ 0.6. However, the real situation is $ 41.58 per share. It is not difficult to find that the market has no such expectations from the stock price that day.

TELADOC's prediction of the performance of 2022 in Q4 in Q4 in 2021 (screenshot from TELADOC's quarterly financial report preview)

This unpredictable huge loss may also be the main reason for investors' anger and cause collective lawsuits. After all, objectively speaking, it is not a large number of income to be commonplace for enterprises, and it is not a big number for hundreds of millions of income in a single quarter.

What makes investors unacceptable is that TELADOC's financial report prediction specifically explained that although the loss per share is $ 41.58 per share, in fact, the part of "goodwill impairment" is $ 41.11 per share. It is only 0.47 US dollars -for investors with a actual loss of nearly $ 42 per share, it is obviously not the case.

However, these anger investors may not expect that they will bear the blow.

TELADOC's second quarter financial report announced in July another $ 3.1 billion. Fortunately, there is already market expectations. At least this financial report has not triggered the stock price diving, but its stock price has plummeted by 88% compared to last year's high level.

Two financial reports have caused many investors to lose heavy losses, including Cathie Wood, known as the "female version of Buffett". The nickname "Sister Wood" has always been optimistic about TELADOC.

In the latest quarterly report, TELADOC itself has also greatly lowered expectations. In 2022, the annual revenue of US $ 2.5 billion to US $ 2.5 billion, the expected maximum loss per share of the year reached $ 62, and the adjustment of EBITDA reached 2.4-265 million US dollars. Compared with the predictions made at the end of 2021, various indicators have decreased.

TELADOC's comparison of 2022 comparison of the annual performance forecast of 2022 Q2 in Q4 and 2022

The main reason for TELADOC's plunge in performance is not because of insufficient seasonal revenue. In fact, although the growth of revenue has slowed sharply, the quarterly revenue still increases by 18%, reaching $ 592 million. What really caused huge losses was the goodwill impairment caused by the acquisition of Livongo the previous year.

A goodwill as an asset of an enterprise refers to the ability of an enterprise to obtain a normal profit level (that is, the excess income), which is the present value of the excess revenue realized by the company in the future; The purchase price exceeds the fair value of the net assets of the purchased enterprise.

Popularly speaking, goodwill is produced in the merger of enterprises. The part of the purchase price paid by the acquisition enterprise exceeds the fair value of the net assets of the purchased enterprise, that is, the premium part of the merger and acquisition is goodwill.

In the early days, goodwill has gradually decreased in many years of amortization. According to the 16th opinion of the US Financial Accounting Standards Committee (FASB) in 1970, the goodwill formed by corporate mergers and acquisitions can be amortized in less than 40 years, that is, goodwill amortization.

This method is similar to the form of goodwill as a device, and slowly depreciates in its life cycle. However, whether it is an amortized period or amortization method, it is suspected of arbitrary and profit manipulation, nor can it guide the future profitability of enterprises. This will reduce the usefulness of financial information.

Therefore, FASB promulgated SFAS No. 141 "Corporation of Enterprise" and SFAS No. 142 "A goodwill and other intangible assets" in 2001, which canceled the amortization of goodwill, and replaced the goodwill to test. In this case, once the acquired enterprise has determined that it cannot bring expected growth to the enterprise, the impairment of goodwill will occur, and to a certain extent, it represents that the merger purchase and the expected effect will not be achieved.

AOL era Warner is a well -known goodwill impairment. AOL and Time Warner merged in January 2000. The new company's market value after the merger was as high as US $ 350 billion, which was called "century merger". However, in January 2002, Warner's AOL era announced the US $ 54 billion in goodwill impairment, setting the highest record in the United States in a single quarter. In 2003, AOL era Warner lost as much as $ 98.7 billion and the market value evaporated nearly $ 100 billion. TELADOC acquisition of Livongo spent $ 18.5 billion, but it calculated the acquisition valuation based on the latter's 30x income in 2021. This caused a micro -resignation at the time, thinking that the premium was too high. You know, although the first quarterly profit has been achieved, the market value of Livongo has just exceeded $ 10 billion in July 2020.

In contrast, Siemens's acquisition of Nishimako's giant Varian, which accounts for more than 50%of the world's radiotherapy market, also spent only 16.4 billion US dollars. The cost of TELADOC's merger is evident. After the merger was announced, TELADOC and Livongo's stocks also fell 19 % and 11.4 %, respectively.

It is worth mentioning that at the end of the second quarter of 2020 before the acquisition of Livongo, TELADOC's goodwill was $ 1.69 billion. The acquisition of Livongo made TELADOC's goodwill reached $ 14.58 billion. At present, TELADOC has a goodwill of 9.63 billion, but there is still a goodwill of nearly $ 3.3 billion in its reports from the acquisition of Livongo. If the impairment continues, it will cause tremendous pressure on TELADOC.

Internal and external problems, TELADOC shows the dilemma of Internet medical care

This is not a big problem if both companies can maintain continuous high -speed growth as expected. In fact, this will not cause goodwill impairment at all. The key is that the growth momentum of the two companies has slowed down significantly.

Taking TELADOC as an example, member income occupies the main part in the component of its income. Such users are mainly paid by employers or insurance customers. Member subscription contains a certain number of access, and exceeds the additional payment.

Whether it is a member or only pay for it, the cost is much more expensive than the membership cost. According to estimates, the unit price of the additional payment of membership in 2020 is almost 50-60 US dollars, and only at $ 60-70 according to the cost of $ 50-60. In contrast, membership costs only need less than $ 20. Therefore, B -end customers generally adjust the number of members purchased according to the degree of membership activity.

Because of this, the revenue contributed by a single member is actually not high. Before the fourth quarter of 2020, the revenue contributed by TELADOC per quarter in each quarter has been around $ 3. The continuous high growth in the past few years has mainly relied on the continuous growth of the number of members, and this mainly comes from continuous acquisitions.

However, the number of members of TELADOC continued to grow at a rapid growth in the second quarter of 2020, and it has been hovering at a level of 51 million for a long time. Considering that the population of the United States is only more than 300 million and increasingly fierce competition, the cost of relying on the way to increase the number of members will be increasing.

The acquisition of Livongo, which specializes in the management of chronic diabetes, can effectively increase the unit price of membership. Livongo adopts a combination of hard and hard services. If users buy members, they also need to buy Livongo's blood glucose megacles, blood pressure meters or weight scale and other networking devices to monitor the corresponding data. After that, users can pay monthly, or pay for inquiries on a monthly basis.

In the US medical insurance system, employers should buy commercial insurance for employees, and usually employers need 80%of the amount of insurance. The specific proportion depends on the company's welfare system. Chronic disease employees are the big heads paid by insurance companies, not only need to pay for their existing treatment; once the management is not good, the hospitalization will be expensive. These are paid by insurance companies, so insurance companies need to manage the course of diseases for chronic disease employees.

Insurance companies are convinced that the expenditure is reduced and controllable, and it will inevitably return some interests to the employer in some way; for employers, employees' health can reduce the time of misunderstanding of sick leave. Therefore, when Livongo uses conclusive evidence to prove its return on investment, insurance companies and employers are willing to recommend Livongo services to employees.

As a result, Livongo established a B2B2C business model: customers are companies that buy medical insurance for employees, and insurance companies and PBM are channel merchants to help recommend customers, and corporate employees who really enjoy Livongo innovation services.

Therefore, although Livongo has less than one million yuan in the number of members; the income contributed by a single member is much higher than that of TELADOC. At that time, the number of members of Livongo was also growing at a high speed -its number of members in the second quarter of 2021 increased significantly by 74.4%compared with the same period of the previous year.

At the same time, TELADOC can also further expand the fields of disease covered, thereby providing members with more comprehensive services, and even to achieve internal conversion -for example, diabetic users managed by Livongo may also have other aspects of diseases. Clinic needs. According to TELADOC's estimates, an employer with 10,000 customers adopting a multi -product service portfolio will bring 4.1 times revenue than single disease services. Judging from the membership revenue published by TELADOC's quarterly report after the acquisition, Livongo's addition does significantly increase membership income. The average income contributed by each member in the single quarter has doubled from about $ 3 to the level of $ 7.

Surprisingly, since the completion of the acquisition, the number of members of Livongo has also changed the previous high -speed growth trend, which has stalled at the level of 700,000.

Not only is Livongo, but the growth of TELADOC itself has also greatly slowed down. The income has slowed down in the fifth quarter of consecutive quarters, and key indicators such as members and visits have also grown weakly. In fact, it is not only TELADOC facing this problem. Its main competitors AMWELL and One Medical are also facing the same problem.

In the second quarter of AMWELL's 2022, the quarterly revenue was US $ 64.5 million, which was only 7%in quarterly revenue in the same period last year. Among them, the subscription income was 29.6 million US dollars, and the visit revenue was 29.7 million US dollars, an increase of 10%and 8%compared with the same period last year.

This level of revenue is not even inferior to the first quarter of 2022 -its revenue in the first quarter was US $ 64.2 million, an increase of 12%over the same period last year. Growing 17%and 10.4%.

The One Medical, which was just acquired by Amazon, was slightly better. In the second quarter of 2022, revenue achieved revenue of US $ 255.8 million, and the number of members was 790,000, an increase of 112%and 27%over the same period last year. However, if compared with the first quarter, it will be found that the growth is also weak -One Medical achieved revenue of US $ 254.1 million in the first quarter, and the number of members was 767,000.

At the same time, One Medical's losses are still expanding, from the net loss of $ 90.9 million in the first quarter to $ 93.8 million.

Obviously, the days of Internet medical star companies in the United States are not too good. Part of the reason is that the United States' relaxation of the new crown epidemic control has weakened the demand for remote medical care compared to before. This has led to a decline in the growth rate of Internet medical demand.

But in the long run, the U.S. Internet medical utilization rate has indeed increased significantly compared to the epidemic. According to the monthly statistics of Fair Health, the ratio of the expenses of remote medical reimbursement in the United States in May 2022 in all consultation reimbursement fees reached 5.4%, an increase of 10%compared to 4.9%in April. In February 2020 before the epidemic, this ratio was only 0.38%that could be ignored.

Among them, the consultation of mental health diseases has occupied an absolute share for many months. In May statistics, the ratio of these diseases accounted for 62.8%of all Internet medical care.

The results of Deloitte's investigation after the connection and mobile trend in 2022 are more optimistic. 49%of the respondents said that they had used Internet medical treatment at least once in the past year. If the interviewee is divided, 59%of the post -00s indicate that they have used Internet medical treatment at least.

Secondly, Internet medical competition in the United States is also increasing. At the end of July, Amazon announced the acquisition of One Medical for $ 3.9 billion, which is the third expensive acquisition in Amazon history. His CEO Andy Jassy also said that Amazon will further increase medical care.

In addition to the giants' entry, there are also many small service providers who specialize in certain types of specialized diseases have sprung up. As a benchmark company for Internet medical care, TELADOC's competitive pressure is not the same compared to the high -speed growth period.

What pits did TELADOC step on? Why break the game?

Acquisition is undoubtedly one of the direct factors that cause TELADOC to fall into crisis. For other Internet medical companies, TELADOC's experience in acquisition can also be for reference. In TELADOC's past success, big acquisition is an important reason. Compared with the slow development of internal students, acquisitions can indeed expand the company's scale quickly. The scale is also one of the most important elements in TELADOC's business model.

However, mergers and acquisitions are also a double -edged sword. Once it is not handled well, it is likely to hurt itself. Just like eating too many foods in the human body in a short time will indigestion, super mergers and acquisitions will also lead to "indigestion" of the enterprise.

The acquisition of Livongo allows two Internet medical star companies to grow and make up for a new flagship to create a new consumer -centric Internet medical model. Frankly speaking, this long -term strategy of TELADOC is not a big problem. The key is that TELADOC's acquisition is not the best period. The transaction value is too overestimated, and the expected "1+1> 2" is only an ideal estimate.

Interestingly, the core team of Livongo left the speed after the acquisition was completed, including CEO Zane Burke, president Jennifer Schneider, CFO Lee Shapiro, and the business development department. Senior Vice President Steve Schwartz. In addition, Glen Tullman, the founder and chairman of Livongo, quickly left the company and began to re -start a business.

Considering the emergence of ultra -high premiums, and the departure of the senior executive team of mergers and acquisitions, it is doubtful whether the benefit transportation is involved in this acquisition process. But what can be determined. The team that has led Livongo's successful corporate culture and personnel has disappeared. This is undoubtedly a taboo for the acquisition.

The number of members of several benchmarking companies falling into stagnation, showing that the 2B channels of the United States Internet Medical Relying on high -speed growth are on the top. On the one hand, a powerful large employer or insurance company began to build remote medical services. Amazon launched Amazon Care, which was only targeted at employees before, and then faced it all over the United States, and finally acquired directly. On the other hand, due to the limitations of Internet medical care, the willingness to receive services in the existing members has also declined.

TELADOC also realizes this problem. On the one hand, it tries to attract users by acquiring specialized sick service providers such as Livongo; on the other hand, it is also developing 2C channels. For example, TELADOC cooperated with Amazon in February to use smart speakers supporting Alexa services to provide customers with 24 × 7 non -rescue general medical services.

In addition, TELADOC has increased the promotion of its mental health service brand Betterhelp. The service is a consumers who have no mental health insurance or cannot find the therapist in their health plan network to meet important social needs.

However, this has also led to the soaring marketing cost. Its advertising and marketing costs in the first quarter of 2022 reached 187 million US dollars, an increase of 49%over the same period last year. Advertising and marketing costs in the second quarter remain high, reaching 165 million US dollars, an increase of 69%over the same period last year, accounting for 27.8%of its seasonal revenue.

However, at least TELADOC's current growth rate has slowed down, but it still maintains. At the same time, the team that created a high -growth myth is still there, and there are 880 million cash and equivalent on their accounts. In addition, investors still believe that Internet medical care still has huge imagination. The heavy losses "Sister Wood" still continuously buy at the low position. At present, the Ark ETF, a subsidiary of "Sister Wood", has nearly 12%of TELADOC's shares, becoming its largest shareholder.

In an interview, the star investor stated: "We want our (hold) company to make active investment, and we don't want profits now. We hope they are actively investing because we are entering many winners to eat markets that are eaten by all winners. ","

She used Amazon's example to cheer TELADOC. When Amazon first listed, the stock price was about $ 18, and then soared to $ 180. Around 2001, Amazon lost about 90%of the market value and fell back to the origin, which basically meant that its capital costs increased by ten times. Today, Amazon's stock price has returned to its original level.

However, the excessive decentralization of equity leads to control. It may not be good news for TELADOC. After all, the ultimate goal of capital is still to make money. The losses of the "Sister Wood" will eventually seek the opportunity to return the book, which will lead to the possibility of TELADOC's long -term strategy.

Ali Parsa, the CEO of the star digital medical company Babylon Health, also believes that TELADOC can learn from Amazon's re -rise 20 years ago -Amazon focuses on distinguishing the company from competitors to distinguish between the company at the trough. The field of coming locks e -commerce. Today, Amazon is the world's top e -commerce giants.

TELADOC can focus on competition by focusing on the ability to distinguish it from competitors, such as providing users with better health prevention. Increasing investment in technology is a more wise measure. This can allow the service provider to remotely track the health status of patients, provide personalized nursing suggestions, and give the ability to upgrade health issues to distinguish themselves before the need for expensive acute treatment to distinguish themselves to distinguish themselves. Essence This is exactly the path that Babylon Health has been implemented.

In contrast, although domestic Internet medical care is far from the United States in the industry background and model, it is not lost to foreign countries in the exploration of digital technology.

For example, the just released Ping An Health Financial Report mentioned more digital technology operations and extensive resource integration in corporate customer employee management medical services, and introduced digital technologies such as blood pressure watches into the management process. JD Health has recently held a digital wisdom medical conference with the theme of "real integration and wisdom to the future". Micro -medicine tried to explore on artificial intelligence medical devices.

At the same time, domestic Internet medical care has also tried to combine digital therapy, so as to truly help solve the disease itself, rather than the form of lightly diagnosis in the past. This will also greatly increase the ability of Internet medical treatment to solve the actual pain points of patients' diseases, rather than simply using it as a drug prescription tool. From the perspective of the current situation, it is not surprising that the acquisition of TELADOC will become the party who has been acquired in the future. After all, TELADOC, which is almost at the bottom of the valley, still maintains huge networks and popularity, and its industry imagination has huge potential.

For example, Amazon, even a year ago, was even a customer of Internet medical. But in less than a year, Amazon entered the venue from the construction of Amazon Care for employees to the speedy acquisition of One Medical. As its competitors, Wal -Mart also acquired some small medical service providers. In addition, there are many super players who have a strong interest in medical care.

Over time, after the giants accumulated experience in the operation of slightly smaller service providers, they may not be able to start with TELADOC, thereby establishing their leadership position in medical and health -if TELADOC still has no predicament.

What will happen to this global Internet medical benchmarking company? We will also keep attention at any time and bring first -hand reports.

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