A federal judge has dismissed a securities class-action lawsuit against Teladoc Health, the virtual care company, regarding its $18.5 billion merger with Livongo, a chronic care company.
The lawsuit, initially filed in 2022 by shareholder Jeremy Schneider on behalf of parties who bought Teladoc shares between February 2021 and July 2022, alleged that Teladoc's representatives deceived investors by downplaying the challenges of integrating Livongo after the acquisition.
The lawsuit also claimed that the company's misleading statements artificially inflated Teladoc's stock price over a period of 17 months.
Teladoc filed a motion for dismissal, and on Wednesday, U.S. District Judge Denise Cote in New York granted the motion, thereby closing the case.
Judge Cote referred to Teladoc's S-4 registration statement, which was filed with the U.S. Securities and Exchange Commission during the Livongo merger, as a contributing factor in the dismissal.
In the SEC filing, Teladoc stated, "Combining the business of Teladoc and Livongo may be more difficult, costly or time-consuming than expected," and "the failure to successfully integrate the businesses and operations of Teladoc and Livongo within the anticipated timeframe may have an adverse impact on the future performance of the combined company."
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