Another day, another downward move in Amwell (NASDAQ:AMWL). This time, the move comes on real news and not speculation, bringing pain for fans of AMWL stock. So what do you need to know? And is the issue with Amwell stock something a doctor can cure?
To start, investors should understand a little bit of the context here with AMWL stock. Importantly, Amwell is a relatively new entrant to the public markets, and even more importantly, it is a specialist in all things telemedicine. It helps enterprise clients offer the necessary services, and it also allows individual patients to book a variety of virtual appointments.
Since it came public at the end of September, Amwell has been doing relatively well, tacking on gains of nearly 30%. However, things changed abruptly yesterday. Although it was not truly clear why investors were selling off shares, it seems that the novel coronavirus vaccine news played a large role.
Essentially, there has been a lot to celebrate on the Covid-19 front. Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) have started to roll out vaccinations in the United States and the United Kingdom. Moderna (NASDAQ:MRNA) could receive emergency-use authorization from the U.S. Food and Drug Administration as early as this week. And once the majority of Americans are protected, some investors are worried the appeal of telemedicine will dull.
That speculation weighed on AMWL stock yesterday, but it turns out there is another major catalyst hurting shares today. In fact, this big catalyst is also bringing peer Teladoc (NYSE:TDOC) down too.
Amazon Deals AMWL Stock a Blow
What is that big catalyst? Well, according to Business Insider, Amazon (NASDAQ:AMZN) is making a big move into the world of telemedicine. According to the reports, Amazon wants to offer primary care services to employees at other large businesses through its Amazon Care division. Although it is still in a pilot mode, Amazon Care has been serving in-house employees since 2019. It allows employees to request virtual or home visits, and is considered among other employee perks.
Now, Amazon is taking things up a notch. According to people familiar with the company, Amazon envisions Amazon Care becoming a benefit for other firms. Sources claim it has already courted Zillow (NASDAQ:Z) as a potential customer.
As the news broke, AMWL stock and TDOC began to suffer. This should be unsurprising to investors — Amazon entering an arena with its big muscle and deep pockets certainly merits attention. And investors also likely know that this is not the only healthcare move Amazon has made recently. Just a few weeks ago, the company announced expansions to its online pharmacy business in a move that sent GoodRx (NASDAQ:GDRX) stock falling. Now it seems the company wants to go from the world of pills to the world of virtual health visits.
So how should investors consider this? Business Insider was quick to highlight that Amazon is still in the early stages of many of its healthcare initiatives. Therefore, its moves to disrupt more established telemedicine players will take time and effort. However, there is no denying that CEO Jeff Bezos works to get what he wants, and Amazon is no stranger to industry disruption.
Keep a close eye on AMWL stock here. Investors should wait to see what move Amwell and its peers take next against giant Amazon.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
