Down 94% from the infamous February 2021. These kinds of goofball charts are stunning — and now totally common.
By Wolf Richter for WOLF STREET.
Teladoc, which provides virtual healthcare services, including through AI, under various brands over the internet and via mobile devices, and which became a huge pandemic spike-boom darling, reported another big net loss today, $57 million in Q3. Revenues grew a lame 8% year-over-year to $660 million.
This brought its cumulative net loss since its IPO in 2015 to a fabulous $15.2 billion, exceeding its cumulative revenues of $8.9 billion by a wide margin. This kind of stuff – losses nearly twice as large as revenues over a span of nine years – takes some doing!
The stock [TDOC] tanked another 6.7% to $16.90 a share in after-hours trading today, below its IPO price in 2015 of $19, and down by 94% from the intraday peak of $308 in February 2021. Obviously, after that 94% collapse, today’s 6.7% drop can barely be seen (data via YCharts):
These kinds of charts are just stunning, in a goofball sort of way. But they’re now totally common, and my pantheon of Imploded Stocks is full of them.
It’s another one of those hype-and-hoopla outfits that just keep losing money every single year, and periodically unspeakably huge amounts of money, which was one of the essential preconditions for becoming a spike-boom darling during the pandemic in the first place.
But folks are now gradually coming out of consensual hallucination, as I have come to call it, and then they’re smelling the bad breath.
At that peak in February 2021, the company had a market cap of $44 billion; now down to $2.8 billion. The remaining $41 billion of consensual-hallucination money have evaporated.
That February 2021 became infamous here because that’s when we noted that stuff started coming unglued, after the breathtaking spike-boom, to the point that it caused us to muse here on March 3, 2021: “Was That the IPO Stocks Bubble that Just Popped?,” in which Teladoc also appeared as a top holding of the ARK Innovation ETF [ARKK], which had already begun its long and hard collapse, and which is now down 77% from its peak in said February 2021. These outfits are in my vast pantheon of Imploded Stocks.
For Q4, the company projected another big loss on revenues of $658-$683 million.
Like so many of these outfits, the company hands executives and employees big-fat stock-based compensation packages. In Q3, stock-based compensation expenses amounted to $53 million. Stock-based compensation dilutes the bejesus out of existing stockholders.
But the dilution doesn’t really show up in a painful way when the company keeps losing money every quarter, and what gets diluted are effectively the losses per share, and so the losses per share could theoretically decline over the years due to dilution even if the net losses, expressed in tens of millions of dollars every quarter, stay the same.
In other words, dilution doesn’t make any difference if the company keeps losing money. Dilution only matters when the company makes money.
And that’s a game that permanently money-losing companies play. They’re just ripping their investors off. It’s a good thing that investors have now thrown this stock out the window onto the huge and growing pile of similar stocks.
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