The co-founders and executives of Talkspace left within five months of their public company tenure. On Monday, Talkspace suddenly announced the departure of CEO Oren Frank and Director of Clinical Services Ronnie Frank, and Chairman Doug Braunstein will take over during this period. Coupled with a lower-than-expected quarterly earnings report, the company’s stock price plummeted 36%, closing at $2.16 on Tuesday.
Although the company did not comment on the reasons for the sudden change, Braunstein said on the earnings call, “We did not start as a public company the way we hoped, and obviously we are disappointed.”
He added that the board of directors has been discussing management and succession issues with the leadership of Talkspace, and jointly deciding to make changes.
“Obviously, as you can see from the press release issued, Oren agreed that this was the right decision made at the right time,” he said.
Talkspace co-founders Oren and Roni Frank were clearly absent from Monday’s earnings call.The husband and wife team founded this company nearly ten years ago, and Ideas for people to text therapists.
In the press release, Frank said: “I am extremely proud of the company Roni and I have built. Roni and I are both entrepreneurs and we look forward to the next adventure.”
Although Talkspace touts making treatment more accessible, it also faces challenges. As early as 2016, the former therapist raised concerns about patient safety. Tell the edge Talkspace does not have a good practice for reporting dangerous situations.Allegations regarding its privacy practices recently New York TimesLater, a former employee sued the company for improper dismissal, claiming that Talkspace’s leadership “replayed” his private conversation with the therapist in front of other employees. Talkspace countered the report, Said its platform complies with HIPAA standards.
Talkspace goes public in June Merger with a special purpose acquisition company (SPAC) was founded by former JP Morgan Chase executive Braunstein (Braunstein).
Currently, the The company has more than 60,000 active members, A little more than half of them access their services through their company or insurance. Although the company’s B2B business has grown significantly, the number of people directly accessing its applications has slowed.
In total, the company’s net income in the third quarter was US$26.4 million, which was lower than analysts’ expectations and only increased by 23% over the previous year.
It was also charged a one-time fee of US$2.8 million in connection with visit claims made through insurance companies and EAP programs. Jennifer Fulk, Talkspace’s new chief financial officer, said that “claims processing has been a highly manual and complex process so far,” adding that as the company expands its business, it’s important to improve this.
The company reported a net income of $1.5 million for the quarter, higher than last year’s net loss of $2.7 million.
When the company was looking for a new CEO, Braunstein stated that he planned to deal with some of these challenges during this period. For example, he plans to focus on hiring more therapists as employees rather than as independent contractors, which is the original model of Talkspace.
He also plans to increase the synergy between the company’s B2B and B2C channels, focusing on the company’s product roadmap and investing in its brand. In the final analysis, he said this is for better execution.
“Fortunately, the board and I believe that some of the operational challenges that have had a negative impact on the business this quarter are solvable and corrected over time, which should have a positive impact on performance,” he said. “I do hope that our management team will work with me to pay more attention to execution, prioritization and stricter capital allocation methods.”
The company has $223 million on its balance sheet, and it has enough cash to use.But as other companies sell mental health services to employers, it is also wasting time, such as Lyra with Ginger/headspace, Are also expanding their market share.
“Although we believe that the implementation of these initiatives should lead to more effective customer acquisition, higher satisfaction and better retention rates, we have reached this disappointing point, especially considering that the problem must be solved rather than exploited. The unique opportunity cost of tailwind raises awareness of behavioral health,” Cowen managing director Charles Rhyee wrote in a research report.
William Blair partner Ryan Daniels’s tone was slightly more optimistic. He pointed out that although this was a disappointing quarter, as the company transitioned from a founder and CEO to a CEO with more public company experience, the search for a new CEO might be positive.
Photo: Alisa Zahoruiko, Getty Images
