Michelle ThompsonOver the past 15 months, the US markets have experienced significant growth, with the S&P 500 soaring by 24% in 2023 and achieving 22 new all-time highs in the first quarter of 2023.
However, not all companies have benefited equally from this market surge. Direct-to-consumer brands, including well-known names like HelloFresh, Peloton, Allbirds, Stitch Fix, Warby Parker, and Rent the Runway, have seen their stock prices decline sharply. These companies, which bypass traditional retailers and wholesalers, have witnessed their stock prices plummet by at least 75% from their peak market values, with many experiencing declines of 90% to 95%.
Some industry insiders doubt the ability of these companies to stage a recovery.
The economic uncertainty, whether real or perceived, tends to shift investor sentiment from optimism to caution. In 2022, concerns about an impending recession, rising interest rates, and inflation led investors to prioritize safety over high-growth stocks, favoring companies with strong fundamentals and profitability.
However, direct-to-consumer (DTC) companies have struggled to achieve profitability themselves. Despite their efforts, companies like Allbirds, Warby Parker, Rent the Runway, and Purple have reported significant losses in recent years.
These companies, founded during the mid-2010s amid a surge in venture capital funding, prioritized rapid growth over profitability. With the market now favoring profitability, many of these businesses have struggled to adapt.
While low stock prices may deter investors, they can attract potential buyers. Companies like Blue Apron and Casper have been acquired and taken private after experiencing lackluster performances in the public market. Other companies, such as SmileDirectClub and Winc, have faced bankruptcy.
Going private may offer struggling companies a more viable path forward, as it allows them to avoid the costs and pressures associated with being publicly traded.
Costco initiates the provision of Ozempic prescriptions to select members.
While some patrons visit Costco for its renowned $1.50 hot dogs, others now have access to a different offering: $179 Ozempic prescriptions.
The retail giant is expanding its services to provide its US members with prescriptions for GLP-1 weight loss medications through its cost-effective healthcare partner, Sesame.
Costco initially teamed up with Sesame last fall to offer online health checkups for as low as $29. However, after noticing that a significant portion of customer inquiries pertained to weight loss, Costco and Sesame collaborated on a new program to address this demand.
The result is a renewable three-month program launched on Tuesday, which includes a video consultation with a weight loss doctor or specialist, a GLP-1 or weight loss prescription (if deemed appropriate), and ongoing support through unlimited messaging and guidance from a healthcare provider.
Sesame asserts its capability to prescribe injectable semaglutides like Ozempic and Wegovy, as well as oral weight-loss medications. The company claims that patients could potentially lose 5% of their body weight in three months, 10% in six months, and 15% in a year.
However, it’s important to note that the cost of medication is not covered in the $179 three-month plan. Sesame cautions on its website that without insurance, GLP-1s can range between $950 and $1,600 per month.
Tesla experiences a much steeper decline in sales than anticipated.
Tesla has reported its first annual decline in sales since the onset of the pandemic, as heightened competition in the electric vehicle market, both from Chinese and Western automakers, has dampened demand. CEO Elon Musk’s electric car company disclosed that it manufactured 433,000 vehicles but only delivered 387,000. This figure represents a decrease from the 484,507 cars delivered in the last quarter of 2023 and also from the 422,875 vehicle sales in the first quarter of the previous year.
In response to the intensified competition, Tesla has opted to reduce prices. While Tesla remains more profitable than traditional automakers, these price reductions have started to squeeze the profit margins that have contributed to the stock’s growth. Investors had previously anticipated that the company would continue to expand its sales, supporting Tesla’s lofty stock price and securing its position as the world’s most valuable automaker.
However, Tesla’s shares experienced a 5% decline on Monday and have already shed more than a third of their value since the beginning of the year.
