What made Teladoc shares tank 40% in extended trading?

Teladoc Health Inc shares (NYSE: TDOC) tanked 40% in extended trading on Wednesday after the virtual healthcare company said it took an impairment charge worth $6.60 billion in Q1 and lowered its guidance for the full year.

Teladoc Q1 earnings snapshot

• Lost $6.67 billion in fiscal Q1 versus the year-ago figure of $200 million.
• Per-share loss of $41.58 was massively wider than last year’s $1.31 only.
• Revenue jumped 24.5% year-over-year to $565.4 million in the first quarter.
• FactSet consensus was for a slightly higher $569 million in revenue.

Much of the goodwill impairment was related to $18.5 billion acquisition of Livongo. CFO Mala Murthy said in the earnings press release:

Guidance and Karen Firestone’s remarks

For the full financial year, Teladoc now forecasts its revenue to fall between $2.4 billion and $2.5 billion. It expects up to $265 million in adjusted EBITDA this year. On CNBC’s “Closing Bell”, Aureus Asset Management’s Karen Firestone said:

The stock is now down more than 60% for the year.