Teladoc Health Inc. (TDOC) experienced a 5% plummet in its stock price during Friday's pre-market session, adding to the substantial decline it witnessed a day earlier following the release of a scathing short-seller report from Blue Orca Capital.
The report alleged that Teladoc misled investors about its BetterHelp platform, claiming that the company used AI-generated responses in place of licensed therapists without proper disclosures. Additionally, the report accused Teladoc of inflating profitability by shifting research and development expenses.
These allegations have raised concerns among investors about Teladoc's financial reporting and business practices, overshadowing the company's recent acquisition of Catapult Health for $65 million to expand its preventive healthcare offerings. Analysts have also released mixed projections for Teladoc's upcoming quarterly earnings report, with estimates ranging from a 23.5% year-over-year decline in earnings per share to modest revenue growth in certain segments.