Hey Stephanie,
The markets tend to not like BIG deals and this is a bid deal for DOC given the company's size. There are also issues around the dillution of shares since it is issuing 55M shares as part of the acquisition - worth noting however, this 19% dilution on a pro-forma basis is offset by a 19% increase in revenue that MBCN will bring to the table. All-in-all, its a wash in terms of revenue per share.
This one will take time to digest. Synergies of $2M is effectively a non factor but its also worth nothing that the $116M deal also includes MBCN's $54M in cash on the balance sheet. There are also plenty of ways to leverage MBCN's mental health services within the CLoudMD ecosystem.
Do i think it can turn it around. Yes. Important to note that the entire industry is in downtrend. CARE, WELL, JNH, DOC, MBCN, LSPK are all down significantly over the past year. The markets have completely reset valuations here as they are waiting to see how virtual care will look like post-pandemic. I certainly believe DOC can be successful, its just this was a big deal for them. It'll take time for the company to prove to the markets that this was money well spent.
Mat
(of note I am long DOC and have zero intentions of selling)