Conversion Labs Inc fka CVLB

[jefra1965]

That was just a big opportunity to go short, make money or increase the position. Either way is just temporary and a side effect of the broad market correction. This will pass.

The curious thing is that the whole TeleHealth sector went into a heavy correction. TDOC was very overpriced at $275-$308 a couple of weeks ago with P/S valuations close to 40X. Investors did not take into consideration that the share count almost doubled with the LVGO merger. The Gross margin will need time to improve and they are only expecting an 80% YoY growth which is very good for a company it's size but every valuation measure needs adjustment due to the increase in share count. The performance will be better but it's because there are 2 companies operating under the same roof.

It's a very interesting merger study case for those who have the time to learn about mergers and their effects in stock price action.

To me, the stock price will drop further to $175.00 because it is still overvalued at $220.00

IMO, the main reason is the huge price that TDOC payed for LVGO and too much expectation. The price was $18.5B, 66X TTM sales and 36X 2021E sales. I can understand why they did it but at the same time investors should have known that this will cause the stock price to move sideways for 12 to 18 months due to the dilution at such high LVGO valuation.

With an 80% estimated YoY growth rate for 2021 (maybe 60-65% for 2022) and a 63% FY2020 (Improving) gross margin I can not see TDOC holding it's current valuation for long. It's stock price will go lower. JMHO. I am interested in owning TDOC eventually and was expecting a sideways SP move for a while but had not had the chance to see all the real numbers before the last financial report.

LFMD is very undervalued at the moment but I am wondering how much of what's happening with TDOC will affect our stock in the short term. i'll be keeping track as it's very interesting to watch how this unfolds. The price drop @ TDOC did not recover before the close yesterday so I think that my theory could be right.