Founded in 2012 by Roni and Owen Frank, Talkspace was one of the early pathbreakers in the field of online mental health care since it went public in 2021 via a SPAC merger.
Its market worth during its peak was estimated at $1.40 billion during its peak; however, now the market capitalization is just about $120 million.
As shares of Talkspace fell because of financial struggles and key employees leaving the company, reports have emerged that the Israeli-American telehealth provider, Amwell, is considering a buyout.
The digital company not only lost two of its founders but shunted out its Chief Operating Officer last November amid speculations that some firms were in talks with Talkspace for a sale or merger in order to stabilize the company.
A report published by Calcalist, an Israeli business publication over the last weekend, indicated that Amwell was in discussion to buy Talkspace for $1.50 per share, roughly amounting to $200 million,a 150% premium over the company’s current trading price of 60 cents per share at the weekend’s close at the NYSE.
The news means that Talkspace could face the possibility of being delisted from Nasdaq, after a letter purportedly sent by them to the digital health company noting that their stock price has remained below the minimum required price of $1 for more than 30 days. Talkspace has been given time till March 17, 2023 to comply with the letter.
The reported deal indicates a sharp decline in the retail value of Talkspace since the online therapy company went public last summer through a merger with SPAC Hudson Executive Investment Corp in a $1.40 billion deal, inclusive of debt.
However, the New York-based firm has been struggling since then as its stock had fallen as much as 93% since it opened at $8.90 on the NYSC when it first went public in June 2021, despite making Michael Phelps, former Olympic swimmer gold medalist, and singer Demi Lovato as celebrity endorsers.
If the tie-up comes through between Amwell and Talkspace, it will bolster Amwell further in the fields of psychiatry and mental health by working with CVS Health to create a new online care platform for its existing members. According to bestonlinetherapy.com, Amwell’s therapy product is currently significantly lacking, while Talkspace is still considered an industry leader in that space.
Talkspace, on its part, acknowledged that an offer has been received but declined a buyout approach from Amwell. In fact, a person familiar with the company’s operation at that time said that Talkspace had rejected Amwell’s expression of interest even before any figures were discussed.
These are not the first rumors of the Talkspace acquisition. Earlier this year, California-based mental health provider, Mindpath, was said to be in a deal with Talkspace, but again it seems that no deal materialized.
Talkwise, the timing is right for Amwell and Talkspace to strike a deal. Talkspace has made a number of changes in leadership, indicating that the organization is well on the road to a new direction.