Shares of Teladoc Health (TDOC -2.57%) were sliding 4.2% lower as of 12:02 p.m. EST on Wednesday after falling as much as 7.6% earlier in the day. The decline came after Business Insider reported that Amazon (AMZN -1.43%) is building a telehealth services business that could compete against Teladoc.
The news that Amazon could enter the telehealth market is about as surprising as Lucy yanking the football away before Charlie Brown gets a chance to kick it. Anyone could see it coming.
Amazon started a telehealth service called Amazon Care in 2019 for its Seattle-based employees. The company hinted that it could expand Amazon Care to more employees in the future. When Amazon makes a move like that, it's going to stoke speculation that the internet giant could be preparing to jump into a new market.
Should Teladoc investors be worried? Probably not. It's too early to know how big of a splash Amazon will make in telehealth. The company hasn't always been successful when entering new markets. More importantly, the total addressable market for telehealth is big enough for multiple winners. Amazon could certainly be a formidable competitor, though.
If Amazon is truly expanding into telehealth, there will likely be more developments on the way in the near future. The potential for Amazon to emerge as a rival to Teladoc could make the healthcare stock more volatile than usual in the meantime.