Hey Snackers,
Surprise: Turns out Elon Musk tried to sell Tesla to Apple sometime in the last few years, but Tim Cook wouldn't take the meeting (he's more of a souped-up Prius guy).
Stocks fell for the 3rd straight day despite Congress passing pandemic stimulus #2.
Peloton jumps 12% after a $420M bike purchase
Biker pro tip... Always splurge on the wheels. Peloton is dropping $420M on Precor, a stationary bike-maker. Precor's an unsexy combo of 625K-sq-feet of manufacturing space and 100 Research & Development employees — but the strategic purpose powered Peloton stock up 12% to an all-time high (get them a mid-ride shoutout, @Toussant).
"Biggest impediment to growth"... That's what one analyst calls Peloton's inability to make its own bikes to meet demand. We call it a hill. Peloton stock is already up over 400% in 2020, but "not-being-able-to-make-enough" is problem #1 (there's still a months-long backorder). With Precor, Peloton buyers will (ideally) not wait as long between bragging about ordering a new bike and actually riding it.
Peloton's unlocking the power of vertical integration... The ability for a brand to vertically integrate, owning its entire supply chain, can control success or failure. Direct-to-consumer icon Casper warned it isn't vertically integrated, leading to long mattress waits that result in lower sales. Peloton's splurging on vertical integration to avoid that.
The US Government sues Walmart for (allegedly) fueling the opioid crisis
You're guilty, too... We already know the biggest villain of the terrible opioid epidemic that ripped apart families and took hundreds of thousands of lives across America: Purdue Pharmaceutical. The fines and penalties coming to the OxyContin manufacturer (and Sackler family behind it) forced their bankruptcy last year. Out of nowhere, another villain:
- The US Justice Dept sued Walmart yesterday, alleging it helped fuel the crisis (and fuel Walmart profits) because prescriptions were filled too easily at Walmart pharmacies.
- Walmart's response: The government's embarassed. Instead of owning up to failed regulation, they're looking for a scapegoat in Walmart.
76 prescriptions for every 100 Americans... That's the average ratio that 200M+ addictive opioids were dealt out annually from 2006-2016 (it's down since, but still very high). We already know the drug company and tons of doctors who played a role in over-prescribing nationwide. Now Walmart's 5K in-store US pharmacies are under the spotlight.
Cut corners, make profit... The lawsuit basically says that Walmart handed out opioids willy nilly, without following proper rules & regs. Walmart stock fell about 1.5% yesterday as it pledged to fight this allegation in court (lawyers are expensive, too). But mainly it's bad PR, a distraction from the company's core biz, and could result in huge fines or penalties.
What else we’re Snackin’
- Spun: IAC stock jumps 14% on word it's spinning off YouTube rival Vimeo into a separate publicly traded company.
- Stream: MGM Studios now wants to sell off the latest James Bond movie, since your local theater is probably empty.
- Shoot: Sportsman's Warehouse stock jumps 40% on news it's being acquired by Cabela owner Great American Outdoors Group.
- Needle: Pfizer is close to a deal with the US government to whip up more vaccine doses than planned.
Wednesday
- Earnings expected from Neogen
- Consumer Price Index report
Disclosure: Authors of this Snacks own shares of Apple and Peloton
ID: 1459234