(Bloomberg) — Teladoc Health Inc., a telemedicine company that is one of Cathie Wood’s biggest investments, lost almost half its value Thursday after slashing its forecast on cost inflation and a slowdown in sales.
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The shares tumbled 40%, the biggest single day selloff since the company went public in 2015. Teladoc, a former stay-at-home winner, extended a slump that’s wiped out nearly 90% of its value since a record high set in February 2021.
Investors had been looking for a bigger payoff as the pandemic drove a pickup in virtual doctor visits, but increased competition, including from insurers, has cut into telemedicine profits. Teladoc’s results are dragging on other stocks in the digital health arena including rival American Well Corp. and health software company Accolade Inc. Amwell fell 8.5%, while Accolade closed down 9.9% at a record low, before sinking more than 20% in postmarket trading after reporting earnings.
Wood’s ARK Investment Management LLC is Teladoc’s largest shareholder, with a 12% stake worth about $652 million, well below Wednesday’s $1.1 billion valuation, according to Bloomberg data. Teladoc, the third-largest holding in the ARK Innovation ETF, adds to the woes at Wood’s flagship fund, which hit a two-year low this week.
Wood’s funds added to their positions in Teladoc on Monday and Tuesday ahead of the telemedicine provider’s report. Wood again purchased about 610,000 Teladoc shares via four ARK exchange-traded funds on Thursday, with most of the buying by its flagship ARK Innovation ETF, according to its daily trading update.
The company is part of a group of former pandemic winners backed by Wood. Others including Zoom Video Communications Inc. have been hit by the ending of covid lockdowns and concerns around rising interest rates that have weighed on growth stocks.
Results for the Purchase, N.Y.-based Teladoc were hurt by higher advertising expenses in the mental health market, as well as an “elongated sales cycle” in chronic conditions as employers and providers of…