Teladoc stock: Cathie Wood’s innovation favorite faces numerous challenges

• Is the rise of stay-at-home stocks over?
• So what speaks for Teladoc?
• Innovations at any price?

During the pandemic, stocks like Teladoc’s have seen incredible gains. The so-called “pandemic stocks” benefited just when public life came to a standstill and numerous shops, restaurants and businesses had to close. After opening, many of these highly rated titles then crashed. “Stay at home is today’s dot-com boom,” tweeted book author James Clark, “lots of failures but some gigantic winners will emerge.”

Stay at home is the dotcom boom of today. Lots of failures but some gigantic winners will emerge.

– James Clark ?? (@mr_james_c) April 20, 2022

Companies like Peloton, which sells fitness equipment that allows people to take classes online, and Netflix also lost subscribers massively.

ARK sticks to Teladoc

The US group in the field of telemedicine and virtual health care, Teladoc Health, made a massive loss for the first quarter at the end of April. The company reported a loss of USD 41.58 per share and at the same time lowered its forecast for 2022. Massive price losses followed in response to the recently published quarterly figures. The stock has lost over 80 percent of its value since its 2021 high. Some of the price targets were halved.
Nevertheless, Cathie Wood is sticking with Teladoc and even boldly buying more. This even moves the finance portal onvista to a comparison with Warren Buffett. Despite losses of around 0.5 billion US dollars, the investor used the more favorable valuation of the shares to strengthen her own position and thus obviously shares Buffett’s maxims.
Commenting on her growth stocks Teladoc, Etsy and Roku at the Seedly Personal Finance Festival in Singapore, Cathie Wood said she no longer felt fear of rising rates as the peak was near and the market had already priced rates in. A rapid fall in inflation would even offer some surprises. The investor therefore continues to rely on the companies she has selected, especially with regard to growth, potential and innovation.
In an interview with CNBC, Wood emphasized that Teladoc was struggling with competitors in the end customer business, but in the USA the company was becoming “the backbone of the healthcare information sector” and even a “killer” because Teladoc, among other things, received a tender from the New Yorker hospital system and entered into a cooperation with Amazon.

Voices on Cathie Wood: Failed Sorceress or Seasoned Manager?

Some ARK investors took to Twitter to express their anger at the losses:

Cathie Wood navigating the $ARKK ETF through this earnings season pic.twitter.com/NmvFUjM7aw

– RammityCap (@RammityCap) April 28, 2022

In his “Real Money” column, hedge fund manager Doug Kass calls Cathie Wood the “Wizard of Wood” and calls her “a combination of hubris and very poor stock selection” that pays any price for her innovations. If ARK’s big innovation hadn’t been Tesla, the fund would have plummeted further, Kass said.
Gita Rao of the MIT Sloan School of Management, on the other hand, describes Cathie Wood to The Street as a very experienced manager with her own style who sometimes “takes a beating”. One should not forget that the shares were valued very highly and the current valuation may be more realistic. “It’s all about valuation, and right now people are saying we need to reassess the value of these stocks,” Rao continued.

Editorial office finanzen.net

Image credits: Cindy Ord/Getty Images for Bloomberg Businessweek