This was posted by Richard Chu on Twitter (I think he sometimes posts here as “digized”

$LVGO + $TDOC quietly released revised merger slides yesterday.

They are now guiding above consensus for 40-45% growth pre-synergy in 2021 (vs 30-40% range set previously). That says something about their confidence.

They estimate a TAM of $121B.

They are also guiding for 15-18% Adj EBITDA margins by 2023. At $195, it currently only trades at ~14x 2021 pre-synergy guidance.

Check out other digital health CEOs sharing their opinion on the merger. Bottom line, it makes sense and more M&A is coming:…

Someone on the thread posted this also:
One slide also confirms that they’ve started cross-selling to each other’s customers before the deal closes by use of a reseller license (CEO said they started the cross-selling the week after the merger was announced). $TDOC $LVGO

Link to twitter thread -…


Thanks for sharing. I believe their guidance will continue to rise significantly for 2021, it was never going to be 30-40%. Wouldn’t be surprised if they finish next FY in excess of 75% rev growth.

Interesting in what “jumped out” for this analyst !

Deutsche Bank analyst George Hill raised the firm’s price target on Teladoc Health (TDOC) to $239 from $225 and keeps a Buy rating on the shares after the company and Livongo Health (LVGO) filed the initial proxy statement for their planned merger. What jumped out the most was that Livongo’s internal long-term projections “dwarf the Street’s and our rough estimates,” Hill tells investors in a research note. If Livongo comes close to achieving its long-term targets, the valuation paid for the company should be considered reasonable in hindsight, says the analyst.


Teladoc (combined Tdoc + Lvgo) seems to have very strong tailwind due to Covid induced distancing/WFH/hybrid „new normal“. This „WFH/social distancing new normal“ seems to be not a short-term but at least mid-term if not long-term trend.

Tdoc‘s revenue growth dropped significantly in 2019 - from 79% in 2018 to 32% in 2019. This however has been „corrected“ to around 80% topline growth in 2020 (organic growth around 70%).

Tdoc‘s business model includes a lot of acquisitions. Considering how fragmented healthcare systems are, this is understandable.

Significant yellow/red flag for me is a lack of significant insider ownership. Proxy statement shows that CEO owns only around 2% and management all together around 3%. This is VERY low in my eyes. Unlike our other companies. Do I miss anything here?

What we will have after the merger is a company with expected revs of around 2b in 2021, GM of mid/high 60s, growing at around 50% (they say 40-45, but let‘s take this as conservative guidance) and trading at around 30b valuation. So, we have next year PS of 15–16 which is these days cheap for 50% or 40% grower (taking into account current ultra low „for long time“ discount rates).

I agree with the view that it‘s VERY HARD to change/challenge health care system and this is a very strong headwind for Tdoc. Now, which is stronger - Covid tailwind or systemic rigidness induced headwind - we will see in next few quarters.

I‘m former Lvgo shareholder. I expect strong Tdoc 3Q results - topline should be growing 100%+. My plan is to hold Tdoc for now and continue to monitor and analyze the data. As we see they have just revised next year outlook upward, so, I hope this „trend“ of upward revisions will continue.

For the long-term I‘m worried about low insider ownership and „rigidness“ of healthcare systems which Teladoc tries to attack. Theoretically, Tdoc could become in healthcare what Amzn became in retail. Amazon was attacking Walmart and other giants and succeeded. HOWEVER, Gorevic does not look to be of Bezos caliber and again he owns only 2% of the company. So, I doubt that Tdoc in 10 years will be Amazon of healthcare.


Significant yellow/red flag for me is a lack of significant insider ownership. Proxy statement shows that CEO owns only around 2% and management all together around 3%. This is VERY low in my eyes. Unlike our other companies. Do I miss anything here? – Learning

2% is insufficient???

TDOC’s market cap is $16 billion. 2% is $800 million. I’m not going to wring my hands over a CEO who has $800 million tied up in the company… I suspect that’s enough to keep his interests aligned with shareholders. :slight_smile:

Rule Breaker / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.


2% is a pittance compared to a company like Tesla
“Musk currently owns around 34 million Tesla shares, or 19% of the company. Under his compensation package, if all of his options vest, Musk can acquire another 20.3 million shares”.
2% may be enough to make him an “owner” whose interests should coincide with other stockholders rather than a highly pair employee whose interests may lie with bonuses and a good retirement package. But I would be happier with a greater percentage. Sink or swim with the rest of us.


Rob, YES, it‘s insufficient in my eyes. This is NOT comparable to our best companies - ZM (Eric owns around 40%), CRWD (George owns 27%), DDOG (Olivier owns 25%). These guys are founders and Gorevic is not, he was hired in 2009 and till now accumulated only around 2%.

Combined management ownership is below 4% which is VERY LOW for companies which we typically own here. Little skin in the game. In the best of our companies management has 5-10x more skin in the game than this.

Moreover, while investigating Tdoc‘s CULTURE I found out about scandal of former CFO/COO - sex scandal + alleged insider trading in 2018. I‘m not saying that the company and C-suite are rubbish but this episode showed at least an aspect of C-Suite‘s culture just few years ago.

All in all, I don‘t have confidence in this company and its management and will be exiting the position. The stock could do well and I hope this for those of us who keeps the position but in my eyes there are better companies and better management teams to trust my money with.

Good luck,


And Rob, 2% of 16b is 320m (not 800m). Again, too little skin in the game for me.

While it is clear that TDOC’s CEO isn’t the founder (a definite minus), I can’t agree that “only” $320M in share ownership is a problem. If $320M is not enough to align his interests with us, the shareholders, then he must be deep in the multi-billionaire ranks.

Seriously… how much is enough to ensure alignment of interests? There is a difference between obscene wealth and massive wealth; $320M qualifies as “massive wealth” for almost everyone not named Bezos or Buffet (and a few others). Personally, I don’t see any additional advantage for someone to own $32B of stock versus $320M.

It isn’t a p*ssing contest as to who has a bigger share of a company, nor does such ownership prove that they are a better CEO. And of COURSE founding CEOs will retain a much higher equity stake than a hired CEO. The only question to be answered?

Is the management sufficiently incentivized by stock ownership to ensure his interests are aligned with shareholders’ interest?

$320M = “Yes”

Tiptree, Fool One guide, no position in TDOC (or LVGO), but TDOC is on my watchlist


In response to Jason Gorevic not owning enough TDOC stock:

  • From what I can gather, he has been CEO since 2009.

  • The company IPO’d in 2015 around $20.

  • I don’t know how much stock he had at that time, but I assume it was less than he has now.

  • By the logic of “he doesn’t own enough stock - therefore I’m not going to invest in the company” I have to assume you would not have invested back then either.

  • Since that time, his record looks pretty stellar. And the stock is a 10-bagger in 5 years. I humbly suggest that ultra-high ownership perhaps should not rule-out TDOC as a possible investment.

  • According to this site - - his net worth is $174M - $138M of which is in TDOC stock. So, he has 80% of his net worth invested in one company.

  • According to this website -…. - “As Chief Executive Officer at Teladoc Health, Inc., Jason Gorevic made $7,995,688 in total compensation. Of this total $515,000 was received as a salary, $669,500 was received as a bonus, $0 was received in stock options, $6,799,988 was awarded as stock and $11,200 came from other types of compensation. This information is according to proxy statements filed for the 2019 fiscal year.”

  • So, he was not the founder, OK. I certainly would prefer a founder with even more skin in the game. But I kind of think he’s going to be motivated and aligned. His salary is only $1M cash. He’s going to be working a lot harder to make the stock go up than he is going to be worrying about his salary IMHO.



Among the factors that aim to predict the future growth of a company, none are more bogus than what percent of shares are owned by executives.

I wish to not be misunderstood, founder led companies mean a lot and passion for work means a lot. What i don’t believe is that excess compensation is an effective incentive to drive performance. Many of our economic theories that pass for science could use a fresh look, IMO.

At a Congressional hearing, Barney Frank asked the major bank CEOs during the financial crisis, how they might perform their jobs differently if they were paid $1-2 million per year instead of $10-20 million. “Would you leave early on Wednesday afternoon” Frank chided? Of course the CEOs offered no answer.

When people accept roles for which they feel fairly treated and for which they have passion, almost without exception they will utilize their creativity to the fullest to carry out their responsibilities. Maybe the CEOs today, whose annual compensation averages 2000-5000 times the salary of the basic shop floor level worker, perform better than those of 50 years ago when CEO compensation averaged 20-30 times. Maybe. But i don’t think so.

Executives shouldn’t get rich for being managers, IMO. They should receive compensation that historical norms consider fair for their level of work. That means that employees who do higher level work are compensated at a higher level, but not absurdly high levels. But they can get rich by risking their own capital and by buying shares on the open market like other shareholders and then grow the company. Their fiduciary obligations to all shareholders demands that they not be excessively paid.

Highly capable CEOs who are not founders and not excessively compensated with SBC, etc. are every bit as reliable if they have the brains, integrity, and passion. Consider modest annual compensation a quantitative indicator of management integrity.

This stuff has been thoroughly researched by the late Elliott Jaques, an unrecognized giant who has gone farther to understand this subject than anyone as it pertains to identifying great leadership and determining fair compensation, and whose work has significantly contributed to my own longer term good fortune in the markets.



Whatever amount of hundreds of millions of dollars it is… It likely a considerable amount of his net worth. In general a management member who is not a founder will not own large portions of the company like the examples you gave (all founders).

I don’t see the fact he only holds 2% or ~$300 million dollars worth as a red/yellow flag. There should be no concerns whether his (and the management’s) interests are aligned. The sex scandal is a bit concering and I would hope everyone involved is no longer at the company.


1 Like

And Rob, 2% of 16b is 320m (not 800m). Again, too little skin in the game for me. – Learning

LOL… you are correct.

Duh on my part. Maybe I was too involved in our vacation! (Six weeks/7000 miles in our motorhome).

As for $320mm being too little for you, that’s fine. Don’t buy it. For me, it’s my #1 holding. I’m quite confident in it, but like you… I’m learning. Even after 55 years of investing. :slight_smile:

Rule Breaker / Supernova Starshot Home Fool & STMP/MTH Maintenance Coverage Fool
He is no fool who gives what he cannot keep to gain what he cannot lose.