Teladoc(TDOC) Prnewswire·2025-02-21 17:38Core Viewpoint - Edelson Lechtzin LLP is investigating potential violations of federal securities laws involving Teladoc Health Inc. due to allegations of misleading business information provided to investors [1] Company Overview - Teladoc Health is a telemedicine and virtual healthcare provider [2] Allegations of Wrongdoing - Blue Orca Capital has issued a report claiming a short position in Teladoc, alleging that the company provides mental health therapy through an AI platform rather than licensed therapists. This practice incentivizes therapists to generate longer, generic messages, which can be easily produced by AI [3] - Therapists are reportedly compensated based on the quantity of words in their responses, leading to potential quality issues in patient communication [3] - Blue Orca's claims are supported by field research, including patient interviews where therapists admitted to using AI in communications [3] Accounting Practices - Blue Orca alleges that Teladoc is using questionable accounting techniques to inflate profitability and cash flows by shifting R&D expenses from the income statement to investing cash flows. This manipulation reportedly inflated EBITDA by up to 32% and operating cash flows by 127% for FY 2023 [4] Profitability Concerns - Blue Orca believes that Teladoc is less profitable and generates significantly less cash than investors are led to believe. The use of AI in mental health treatment is expected to lead to a deterioration of that business and a decline in stock price [5]