Dive Brief:
- Amwell is implementing a reverse stock split to avoid being kicked off the New York Stock Exchange, the telehealth vendor said Friday.
- The company has struggled to reach profitability, and its stock price has declined precipitously since entering the public markets in 2020. In April, the telehealth company received a warning notice from the NYSE that its stock was trading below minimum standards, closing at less than $1 per share for 30 consecutive days.
- The company’s board of directors approved a 1-for-20 reverse stock split, a maneuver that consolidates the number of existing shares of stock to boost its share price. The split will be effective at market close on July 10.
Dive Insight:
Amwell completed its initial public offering during the height of the COVID-19 telehealth boom, when patients and providers flocked to virtual care.
However, the telehealth vendor has struggled to turn pandemic-era enthusiasm for virtual care into lasting financial success. Amwell posted a $73.4 million net loss in the first quarter this year, and its stock closed at $0.38 per share on Thursday.
The company has also conducted layoffs, reducing its headcount by about 10% since the end of 2023, executives said on an earnings call in February.
However, Amwell isn’t the only telehealth provider faltering in the face of declining virtual care utilization and rising competition. Optum recently shuttered its telehealth business, and Walmart sold its virtual care assets after closing its care delivery unit entirely.
Amwell’s closest competitor Teladoc Health has also struggled to turn a profit after growing amid the pandemic’s telehealth expansion. The vendor’s longtime CEO recently left the company, and was replaced by an insurance executive that Teladoc’s board said could deliver “growth at scale.”
Amwell has also made recent leadership changes. The company reported in June that co-CEO Roy Schoenberg would leave his role to become executive vice chairman of Amwell’s board, leaving his brother Ido Schoenberg as Amwell’s sole chief executive.
However, the vendor is hoping it can benefit from the high-profile telehealth exits by Walmart and Optum, executives said on an earnings call in May. Amwell also said it expects it will begin seeing revenue contributions from a contract with the Department of Defense at the end of this year.
Correction: This article originally misstated when Teladoc Health went public. It went public in 2015.
