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Good morning.
Fewer US consumers are ready for prime time. On Tuesday, Reuters reported that signups for Amazon Prime memberships fell 2% in the three weeks leading up to and during this year’s expanded four-day Prime Day promotion in July.
The 5.4 million new signups also fell short of Amazon’s internal target, or wishlist, by about 100,000. Shares in the e-commerce giant fell 1.6% on the day. There’s a joke to be made here, but all you non-Prime signups will have to wait the standard five to eight business days until it’s delivered. |
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Breaking up is hard to do. Even for Warren Buffett.
After Kraft Heinz announced Tuesday that it’d be splitting into two companies, confirming reports from earlier this summer, the Oracle of Omaha told CNBC that he was disappointed that the conglomerate he helped piece together couldn’t make it work. Buffett may be on the way out, but his word still has weight: Shares of Kraft Heinz fell 7% Tuesday.
Snack Attack
The 2015 merger, a $46 billion marriage arranged by Buffett and Brazilian private-equity firm 3G Capital Partners, was supposed to be a match made in supermarket heaven: Kraft’s hot dogs and Heinz’s ketchup, feeding the combined company’s bottom line. What happened next was more like a ketchup splatter on a white T-shirt. While “disappointed,” Buffett conceded to CNBC the merger wasn’t exactly a success but added that a breakup wouldn’t solve its problems. In August, Berkshire Hathaway, the largest Kraft Heinz shareholder, wrote down the value of its stake to $8.4 billion, way below the $17 billion valuation it reported at the end of 2017.
So what happened? The scale of the conglomerate largely added complexity rather than delivering the value that Buffett and co-conspirators envisioned when the two sides first came together. And now, the company faces a triple whammy of headwinds: inflation, which has deterred consumer spending on non-essential snack items, as well as this year’s new tariffs and a years-long trend toward health-conscious diets in the US that has culminated in the Make America Healthy Again movement.
Split in two, Kraft and Heinz may have better luck against the headwinds:
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On one side of the breakup will be a company focused on condiments, headlined by Heinz ketchup and also including boxed meals. It has been the faster-growing side of the Kraft Heinz empire, generating some $15.4 billion in annual sales.
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On the other side will be a company composed of the conglomerate’s slower-growing grocery brands, such as Lunchables and Oscar Mayer, which currently generate around $10 billion in annual sales. CEO Carlos Abrams-Rivera said Tuesday the company is focused on making the grocery items healthier.
Pep In Their Step: Food conglomerate breakups are a Wall Street staple. In 2023, Kellogg split its cereal business from its snacking business, and earlier this summer, Keurig Dr Pepper said it would separate its coffee and soft drink units. Tuesday also delivered the news that activist investor Elliott Global Management has secured a $4 billion stake in PepsiCo and given Pepsi’s board an action plan that recommended divesting underperforming assets in its snacks business. In 2025, that’s just the way the cookie crumbles for packaged food giants.
Written by Brian Boyle |
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United Therapeutics shares rose a breathtaking 33% on Tuesday — actually, it might be more appropriate to say they rose a breath-giving 33%.
The biotech company announced the results of a late-stage study showing its drug Tyvaso significantly enhanced lung function in people with a rare, progressive lung disease. A multi-billion dollar market opportunity is in the wings, and the news was enough to lift United Therapeutics’ rivals pursuing similar treatments. For investors, it’s a breath of fresh air. For patients, it’s a sigh of relief.
Inflate Expectations
The lung condition in question is called idiopathic pulmonary fibrosis, or IPF. The chronic disease is associated with the stiffening of lung tissue, which can lead to permanent scarring that makes it harder for someone to breathe. About 5 million people worldwide are affected, including about 100,000 Americans,
according to the National Institutes of Health. Some 30,000 to 40,000 new US cases are diagnosed every year.
Tyvaso, or treprostinil, when minus the marketing name, significantly improved what’s called forced vital capacity, an important measure of how much air someone can exhale, in a yearlong, 597-patient study. The inhaled drug showed progress not only compared to a placebo, but also in patients taking oral antifibrotics typically used to treat IPF, such as those from Roche and Boehringer Ingelheim. Healthcare-focused investment bank Leering Partners wrote, in a note, that Tyvaso “could function as an unprecedented add-on therapy with additive effects, positioning it uniquely in the IPF treatment landscape.” It’s also a potential financial windfall:
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UBS said in a note that the result means Tyvaso is much more likely to be approved to treat IPF, pending a second late-stage study. The bank said the drug, already approved in the US to treat another rare lung condition, pulmonary arterial hypertension, could reach $3 billion in peak annual sales, up from $1.6 billion last year.
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United Therapeutics rivals Insmed and Liquidia rose 6.7% and 3.2% Tuesday. Insmed is testing an IPF drug that RBC Capital Markets analysts said may outperform Tyvaso, while Liquidia’s recently FDA-approved Yutrepia will compete directly with it.
More Upside: The long weekend heralded a streak of good news for pharma, and more importantly, for patients. On Sunday, Novo Nordisk
said its weight-loss drug Wegovy slashed the risk of heart attack, stroke or mortality by 57% compared with rival Eli Lilly’s equivalent GLP-1 drug among obese and overweight patients. A day earlier, on Saturday, a trial
study showed AstraZeneca’s experimental Baxdrostat significantly lowered high blood pressure in patients resistant to existing treatments, meaning it could help millions worldwide.
Written by Sean Craig |
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Photo via Pacaso |
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The storied writer F. Scott Fitzgerald once mused that “there are no second acts in American lives.” The Winklevoss twins might beg to differ.
On Tuesday, Gemini — a.k.a., the cryptocurrency exchange co-founded by twins and onetime Mark Zuckerberg betes noires Cameron and Tyler Winklevoss — announced it is seeking to raise as much as $317 million ahead of an IPO that would value the company at $2.2 billion. It’s no Facebook, but it’s something.
Running with the Bullish’s
The Winklevii have come a long way since their 2008 settlement with Facebook, which they claimed Zuck stole from them at Harvard. The pair invested early in bitcoin, becoming some of the world’s first bitcoin billionaires and launching Gemini in 2014. More recently, the company has been Exhibit A in the shifting landscape of crypto regulation. In January, days before the inauguration of Trump 2.0, Gemini paid a $5 million settlement to the Commodity Futures Trading Commission after being found to have made false or misleading statements to the regulatory body. By February, a new-look Securities and Exchange Commission concluded a years-long investigation into the company by recommending no enforcement action; in a social media post, Cameron called it a “milestone to the end of the war on crypto.”
Now, Gemini wants to follow in the footsteps of fellow exchanges Circle and Bullish, which have both proven that Wall Street, too, is becoming more and more crypto-curious:
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In early June, stablecoin-issuer Circle
popped in its trading debut, with its share price soaring more than 100% in the following weeks. Momentum has since slipped, however. Circle’s share price is now down roughly 50% from a July peak, paring gains since its debut to 11%.
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Then, last month, Peter Thiel-backed crypto exchange Bullish similarly popped in its debut … and has, likewise, seen enthusiasm taper since. Its share price is now down around 11% from its launch.
Me, Myself and Gemini: For all the crypto enthusiasm, Gemini on Tuesday reported a net loss of $282.5 million against $68.6 million in total revenue through the first six months of 2025. That’s an acceleration from a net loss of $41.4 million on total revenue of $74.3 million in the same period a year ago. It’s blunt, and we’re sure the Winklevii don’t love to hear it, but it bears repeating: Gemini is no Facebook.
Written by Brian Boyle |
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Chrome Lining: A federal judge
said Google can keep its Chrome browser, ruling against the most onerous proposal by the Justice Department in an antitrust case, but will have to cease exclusive contracts and share its search data. The company still plans to appeal to challenge those conditions.
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Bank on It: A federal judge
threw out a class-action lawsuit against 10 major banks, including JPMorgan and Goldman Sachs, that accused them of rigging corporate bond prices.
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