Blue Orca short Teladoc, says ‘far less profitable’ than believed

Blue Orca Capital announced a short position in Teladoc (TDOC), saying evidence shows that even though patients on the BetterHelp platform pay for mental health therapy from licensed therapists, they unknowingly receive “therapy” from artificial intelligence. “We think this is rotten and potentially harmful. BetterHelp knows this is wrong, because it warns on its website that therapy by AI dehumanizes patients and ‘may harm the mental health of clients who use it for therapy.’ Yet, in our opinion, BetterHelp gives its therapists perverse incentives to cut corners by using AI,” Blue Orca writes in a short report posted on its website. The firm thinks Teladoc is “far less profitable and generates far less cash than investors are led to believe, and that accounting maneuvers have concealed that the business is failing to scale.”