No. of Recommendations: 3
For those with a Rule Breaker subscription, a very material article was post there. I just commented on it. I will just state, that at this point, I don't care of TDOC were to become the next Vertex (its not, and it won't) but it is not worth investing in if character and quality of management is an issue for you.

I have dealt with issues like this in my law practice, including in a NASDAQ listed billion dollar corporation that had its stock price soar and was eventually bought out, rewarding insiders and investors very nicely. So it is not that such things don't happen. But these things, although arising from within business, are handled on a personal manner outside of business, never crossing the lines.

That is not what happened with TDOC.

Given it was just discussed I will embargo the information for a few days if you guys don't find it for yourself.

I also have experience working in corporations where such lack of character exists and investors are just a means to cash. We have also seen such corporations during the internet bubble. One egregious example had the CEO come on CNBC and law completely to the face of all the viewers multiple times. Lavish parties, using the company as one's own personal fiefdom (and this was not a small company at all), using margin to enhance one's own share holdings (because 9 figures was not enough) it of course all came crashing down.

Is TDOC like that? Probably not. But since TDOC has so little in regard to what looks like business leverage, so much in "free" money (investor money was used to make more than $600 million in acquisitions), it is even more important to have faith in the integrity of the management team putting all this together. Only they have the insight to know if they are just buying revenue, or buying and building a business with leverage.

Hint: Small acquisitions can turn into huge returns, bit and frequent acquisitions very rarely turn into anything worth the cost.

Makes me much less willing to trust the plan of this management team.

But each to their own due diligence and opinion. There are far more places to invest, and with management teams that probably have more integrity and ethics...(still a not common thing I think on Wall Street - something we have to live with).

Print the post Back To Top
No. of Recommendations: 2

Hey, TDOC responded to the issue!

Let me translate with 100% accuracy, and I am not being facetious here but objectively factual, TDOC denies nothing in the SIRF report. It happened as reported, including the insider sales.

It is a fig, a mask, a process, using an outside law firm to "objectively" investigate the issue.

The COO/CFO should have been summarily fired if TDOC valued integrity at all in its officers in regards to their business dealings. I don't care what they do in their personal. But this directly gets to the state of mind of how a key officer thinks of his business responsibilities.

It would not be so bad if he was not so prodigioiusly making insider sales (pre-planned or not, these are substantial).

Each can investigate and make up their own minds.

Print the post Back To Top
No. of Recommendations: 0
Though a Rule Breaker subscriber, I have yet to read whatever was posted there. But I will independently post this link to my Tweet tagging Jason Moser, as I have heard him tout Teladoc on many, many podcasts.

Link in the Tweet I was replying to, with the report about TDOC:

Summary as I recall from reading last night is that the CFO had an inappropriate relationship and the repercussions of that seem to indicate lacking proper governance.

No TDOC position
No "official" guidance on TDOC issues from TMF services read to-date
Print the post Back To Top
No. of Recommendations: 1
Goes a bit further than that. It is not the inappropriate relationship. The relationship itself is perfectly appropriate. It is the inappropriate behavior as it relates to the business, the company's response, and the very large insider sales this man is making.

I put that into context that in the end, TDOC is a company that is a conglomerate of more than $650 million in acquisitions, all of it provided by other people's money.

I don't want to be here. If this is going on publicly, what is going on privately? How serious do they take their duty to shareholders? How wedded are they to the business and its future vs. cashing out now?

I am sure the founders still have a big stake, etc., but that being the case, one would not only not tolerate this behavior, one would also not reward it either if the founders had similar concerns that investors should have as to the integrity of this business vs. it perhaps being simply a means to buy revenues and raise the share price.

In the end, this is buying an army of loosely knitted, non-supervised, strangers to the company doctors, and providing a means to enable teleconferences with them. Does not seem terribly like a lot of leverage.

It therefore gives me pause to see this sort of thing going on, having both witnessed, and like many seen from TV and newspapers and movies, how this stuff has gone on frequently in companies that grew rapidly and then fell apart.

Print the post Back To Top
No. of Recommendations: 1
The COO/CFO should have been summarily fired if TDOC valued integrity at all in its officers in regards to their business dealings.

Yes, I agree completely. This news looks very bad for TDOC shareholders. Yesterday, two law firms announced class action suits against Teladoc, because the CFO's behavior may have hurt shareholders. I think the stock is likely to plunge further in the near term.
Print the post Back To Top