There is not a large risk of holding and waiting now since the deal is done. Doubtful there will be some hedge fund that comes in and challenges the price. The market may grow to like it better as I would wager analysts will come in and praise the combination trying to raise the share price of Teladoc, which commensurately increases the value to Livongo.
Nevertheless, I don’t like to wait, so out I went. Lesson learned, actually did move the market negatively when I did so. Not usually an issue. Broker usually breaks things up into tranches. I’m not Warren Buffett, but guess one need not be to have the issue. In the future use limit orders. So gave away a few points.
It will be an interesting combination, and an attempt to build out the entire virtual medical experience for General Practitioners. However, I have no doubt that Livongo sold out for what they figured was the best premium they could obtain and did not hold much back. So who am I to argue with management.
Another lesson here is that LVGO’s founder and chairman of the board has talked about this being the most important company he has founded or worked with. Inspirational, and all that. And then they go put the company up on the sales block this early in their existence as they turn profitable. One must always take what management says with a grain of salt as in the end management is a more regulated politician promoting their interests. Happily, for the companies we follow, they are also extremely talented (as Rockefeller said, God gave him the talent to make money and run a business, so he dang will is going to use it) at building the business and increasing the share price so we get to tag along.
That puts the largest cash position I have ever held at one time in the money market. Nice work if you can find it. The premium for the purchase is built in to the 140% or so run up in the last 6 to 8 weeks. Whether or not LVGO had staying power as a sole entity we will never know, but I do agree selling out like this (like say Sendgrid did to Twilio) is not a sign of strength. But lets celebrate as it is certainly not Pivotal running back to VMWare and Michael Dell for help after going public! If any here remember that fiasco (then again, even there, initially there was good money to be made after the first earnings call. Was nice in regard.)
Fool on and all!
Tinker