Shares of both Livongo (LVGO) and Teladoc (TDOC) suffered big declines after the merger announcement on August 5. But now the market seems to be understanding the rationale behind the deal much better, and the two stocks have substantially recovered from their post-announcement drawdowns.
It is easy to see why investors may have initially reacted in a negative way to this deal. However, on a forward-looking basis, Livongo and Teladoc offer the opportunity to invest in an undisputed growth leader with enormous potential to benefit from the digital transformation in the healthcare sector over the