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LVGO deal- talk to me like I’m 6
Posted on 8/5/20 at 9:20 am
Posted on 8/5/20 at 9:20 am
My understanding of the deal
Teladoc Health will pay 0.5920 share plus $11.33 for each Livongo share. That's worth $158.99 a share, or $18.5 billion, based on Teladoc stock's closing price Tuesday. It's a 10% premium over Livongo stock's record closing price of 144.53 on Tuesday.
So aside from us LVGO long holders thinking this was going to continue to run up for years and years - which I was one that was hoping for this.- how is this a bad deal- ESPECIALLY SINCE THE STOCK DROPPED APPROXIMATELY 10% from its closing yesterday?
If anything would not I want to buy more LVGO below the close yesterday to get the close yesterday plus $11 a share - which puts any new LVGO stock at $158 or so ?
Example: LVGO is at $124 right now. If I buy at this price, I am really buying at a $158.99 valuation when the TDOC share award comes into play.
Am i thinking correctly on this?
Teladoc Health will pay 0.5920 share plus $11.33 for each Livongo share. That's worth $158.99 a share, or $18.5 billion, based on Teladoc stock's closing price Tuesday. It's a 10% premium over Livongo stock's record closing price of 144.53 on Tuesday.
So aside from us LVGO long holders thinking this was going to continue to run up for years and years - which I was one that was hoping for this.- how is this a bad deal- ESPECIALLY SINCE THE STOCK DROPPED APPROXIMATELY 10% from its closing yesterday?
If anything would not I want to buy more LVGO below the close yesterday to get the close yesterday plus $11 a share - which puts any new LVGO stock at $158 or so ?
Example: LVGO is at $124 right now. If I buy at this price, I am really buying at a $158.99 valuation when the TDOC share award comes into play.
Am i thinking correctly on this?
This post was edited on 8/5/20 at 9:22 am
5
Posted on 8/5/20 at 9:22 am to Covingtontiger77
The deal doesn't appear to be set fixed at the $18.5B but is floating instead based on TDOC's price. So how TDOC pays for the deal (debt or dilution) could impact how much you get for your LVGO shares.
Posted on 8/5/20 at 9:24 am to Covingtontiger77
quote:
If anything would not I want to buy more LVGO below the close yesterday to get the close yesterday plus $11 a share - which puts any new LVGO stock at $158 or so ?
Example: LVGO is at $124 right now. If I buy at this price, I am really buying at a $158.99 valuation when the TDOC share award comes into play.
Am i thinking correctly on this?
Price is not fixed. 1 LVGO share for .59 TDOC, so as one drops so does the other. And vice versa.
Posted on 8/5/20 at 9:34 am to Covingtontiger77
quote:
talk to me like I’m 6
Two long term winners will become one long time winner. I'm a buyer at these lows.
Posted on 8/5/20 at 10:12 am to Covingtontiger77
I think it was borderline negligence on LVGO's board to agree to a deal that was based on a floating price of TDOC shares. Devil will be in the details I suppose.
Posted on 8/5/20 at 10:21 am to GeneralLee
quote:I've always believed when a merger is announced one side usually "wins" and one side "loses" in the short term.
I think it was borderline negligence on LVGO's board to agree to a deal that was based on a floating price of TDOC shares.
Looking at both LVGO and TDOC right now, the former is down -8.4% and the latter is down -15.4%.
So both are "losers" in the short term from this deal??!!??
I realize both companies have analysts and much more information than I have and maybe they are going all-in on the long term, but if I were a stockholder in either company today I'd be questioning both companies' due diligence process right now.
This might prove to be a hard sell to get the stockholders' approval for the merger
Posted on 8/5/20 at 10:34 am to LSURussian
quote:That's actually what happened immediately after the announcement, but the premium was so skinny (10%) that it was absorbed pretty quickly when TDOC started to slide and lvgo had to track it since they're in sync now.
I've always believed when a merger is announced one side usually "wins" and one side "loses" in the short term.
Posted on 8/5/20 at 10:41 am to castorinho
quote:In that case I agree with General(NameNotToBeRepeatedEverAgain)'s post above.
it was absorbed pretty quickly when TDOC started to slide and lvgo had to track it since they're in sync now.
The decision makers at LVGO should face some difficult questions from shareholders.
Posted on 8/5/20 at 11:43 am to Covingtontiger77
I wish someone would explain why both of these solid companies prices crashed to day after this announcement. This is such a stupid market.
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