From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
TECH-LED MARKET RALLY: U.S. stocks turned positive to end the week after Gilead Sciences said its antiviral drug remdesivir continues to show positive results when it comes to treating very ill COVID-19 patients. Investors brushed off worries over the spike in virus cases: The country hit its sixth daily record of cases in 10 days, and the death rate is now rising in the hardest-hit areas of the Sunbelt. Tech companies are again driving the market higher, with so-called “stay at home” stocks like Amazon, Facebook, Apple, and Microsoft sending the Nasdaq to another record high.
COVID VACCINE, TREATMENT & TESTING DEVELOPMENTS: The remdesivir update from Gilead followed the news that the biotech company had received FDA approval to begin clinical trials of an inhaled version of the drug to be used for less-severe cases. On the vaccine front, the Wall Street Journal reported that Pfizer and BioNTech believe their vaccine candidate will be ready for regulatory approval by year’s end. Meanwhile, a new type of point-of-care testing is emerging that promises to help relieve the backlog at labs by providing results in as little as 15 minutes. The medical device firm BD this week received a coveted emergency use authorization from the government for its version of this test. The company told Cheddar that the new technology is an “absolute game changer.” It involves nasal swabs processed in a portable device that’s already in 25,000 doctor's offices, urgent care clinics and retail pharmacies, and BD is scaling up manufacturing of the assay components with a target of shipping two million tests a week by the end of September.
TIKTOK’S GOOD YEAR GONE BAD: Scrutiny of the Chinese-owned social media phenomenon TikTok appears to be nearing a turning point. After the short-form video app -- backed by a Chinese company, run by an American CEO, and used around the world -- made the decision to exit the Hong Kong market following the implementation of a draconian national security law in the semi-autonomous city, Secretary of State Mike Pompeo said the federal government is considering a ban on Chinese apps like TikTok over privacy concerns. His boss, President Trump, then appeared to confirm that those discussions were in the works, but framed it as a potential retaliatory response to China’s handling of the coronavirus. Also, gaming and YouTube personality Ninja said he deleted the app from his phone over security concerns.
RETAIL BANKRUPTCIES ACCELERATE: The retail bankruptcies are now coming in fast and furious. In the last week, an iconic American clothier, a kitchenware chain with a French name, and a Japanese home-goods store all filed for bankruptcy protection. Brooks Brothers, the longest continually operated apparel brand in the U.S., which has dressed American presidents dating back to Lincoln, was perhaps the biggest to fall. Muji and Sur La Table followed, and Ann Taylor parent Ascena Retail Group is reportedly planning to shutter 1,200 stores as it prepares a Chapter 11 filing. While all those companies have blamed the pandemic-related closures for their troubles, they faced headwinds even before their stores were forced shut, from huge debt loads to a failure to respond to changing fashion and shopping trends.
DELIVERY WARS: Uber, an unprofitable company in an unprofitable industry, announced that it is buying Postmates, another unprofitable company in a different unprofitable industry, as it seeks to diversify from its core ride-hailing business and shore up its Uber Eats delivery arm. It’s a $2.65 billion all-stock deal, and comes after Uber tried and failed to gobble up GrubHub, which was instead acquired by European delivery company Just Eat Takeaway. Uber reportedly plans to keep the consumer-facing Uber Eats and Postmates apps separate, but will combine the back-end technologies and delivery logistics in the hopes of creating a delivery behemoth. Postmates had been making plans for an IPO, but decided an acquisition was a better bet given the red-hot competition and consolidation already happening in the space.
