☕️ Starbucks Business Sale

+ Hims & Hers Eyes Canada’s $4B Weight Loss Market

July 10, 2025

Good Morning! Goldman Sachs is rolling out a new rule that would make junior bankers swear they haven’t secretly lined up another job — every three months. The move targets aggressive poaching by private equity firms, which have been courting analysts before they even start work. It’s the latest escalation in Wall Street’s war for young talent, as firms try to stop what’s known as on-cycle recruitment: signing fresh grads before they’ve even found the coffee machine.

Goldman’s not alone. JPMorgan recently warned grads they’ll be fired if they job-hop within their first 18 months, while Apollo said it’s hitting pause on early recruiting altogether. The concern isn’t just retention—it’s risk. Junior bankers often get access to confidential deal info, which could easily walk out the door.

MARKETS

*Stock data as of market close*

  • Markets bounced back Wednesday, with the Nasdaq hitting a new record thanks to Nvidia brushing $4 trillion in market cap and Fed minutes pointing to 2025 rate cuts.

  • Bitcoin also surged past $112K, notching a new high for the first time since May.

STOCKS
Winners & Losers

What’s up 📈

  • Rhythm Pharmaceuticals skyrocketed 36.63% after positive trial data for its oral obesity treatment. ($RYTM)

  • AES surged 19.78% following a Bloomberg report that the Microsoft-linked renewable power company is exploring a sale. ($AES)

  • Verona Pharma climbed 20.62% after Merck announced it would acquire the U.K.-based respiratory drugmaker in a ~$10 billion deal. ($VRNA)

  • Hims & Hers Health rose 4.66% after revealing plans to sell generic semaglutide in Canada once Novo Nordisk’s patent expires in January. ($HIMS)

  • Penguin Solutions rallied 10.57% after beating Q3 earnings estimates and raising its full-year guidance. ($PSTG)

  • Bloom Energy gained over 18.15% after JPMorgan upgraded the stock, citing potential benefits from Trump’s new tax bill. ($BE)

What’s down 📉

  • RxSight plunged 37.84% after slashing its full-year revenue outlook and reporting a sharp Q2 sales drop for its Light Delivery Devices. ($RXST)

  • WPP dropped 18.09% after the ad giant cut full-year guidance and warned of worsening Q2 performance amid weak client spending and AI disruption. ($WPP)

  • Mobileye Global fell 7.08% after Intel announced it would sell 45 million shares in the self-driving tech company. ($MBLY)

  • Fair Isaac dropped another 6.54% following recent news that FHFA will allow lenders to use rival VantageScore 4.0, challenging FICO’s dominance. ($FICO)

  • Hershey fell 4.70%, extending its losses after naming Wendy’s CEO Kirk Tanner as its next chief executive. ($HSY)

  • Monster Beverage slipped nearly 3.28% after Rothschild downgraded the stock, citing aluminum tariff uncertainty and overestimated 2026 forecasts. ($MNST)

PRIVATE EQUITY
Starbucks Considers Selling Part of Its China Business

Starbucks has officially entered the dealmaking ring. The coffee giant is mulling offers from nearly 30 private equity firms - both Chinese and foreign - looking to take a chunk of its China operation, which remains its second-largest market after the U.S. Valuations on the table range from $5 billion to $10 billion, but analysts say something closer to $3–5 billion is more realistic. TD Cowen called the $10B top-line chatter a latte too frothy.

The company has confirmed it’s not exiting China entirely and still wants to hold a “meaningful stake” potentially around 30% while finding a like-minded strategic partner to help revive growth. Bidders reportedly include heavyweights like Centurium Capital (which backs Luckin Coffee), Hillhouse, Carlyle, and KKR.

Sales Are Stalling, Competitors Are Surging: Starbucks' China business has seen better days. After four quarters of same-store sales declines, Q1 2025 finally showed a flat result—but that’s still underwhelming. While traffic is up, the average ticket size dropped. Market share in China has cratered from 34% in 2019 to just 14% in 2024, as local upstarts like Luckin and bubble tea chains eat away at the premium coffee chain’s dominance.

The company is scrambling to adapt: launching sugar-free drinks, slashing prices on tea-based items, and even appointing a chief growth officer just for China. But analysts say Starbucks’ famously slow decision-making may be a liability in a market where speed-to-market and cultural relevance are everything. Rent concessions from mall operators may also vanish soon, which could further pressure margins.

It’s Giving McDonald’s 2017 Energy

If this all sounds familiar, it’s because McDonald’s did the same dance back in 2017 - selling a majority China stake while holding onto a sizable piece. That deal valued McDonald’s China at $2.1 billion. Starbucks, with over 7,700 stores in China, is eyeing something far bigger.

Still, nothing’s final. Starbucks is working with Goldman Sachs to sift through offers and structure a deal that fits. But insiders say if bids don’t meet expectations, Starbucks might just walk away.

Bottom line:
Starbucks is serving up part of its China business, but with a careful shot of strategy and a splash of self-preservation. Whether this is a bold turnaround play or a last shot at relevance in China’s ruthless coffee market is still brewing.

NEWS
Market Movements

  • 👋 Linda Yaccarino steps down as X CEO: After two turbulent years under Elon Musk’s watch, Linda Yaccarino is leaving the social platform formerly known as Twitter. She helped bring back major advertisers but was often overshadowed by Musk’s antics. ($CMCSA, $TSLA, $AAPL, $DIS, $IBM)

  • 🕶️ Meta takes stake in Ray-Ban parent: Meta spent $3.5B to buy a ~3% stake in EssilorLuxottica, strengthening their smart glasses collaboration. The two have been working together since 2023 and plan to launch more AI-powered eyewear. ($META)

  • 🧠 Analyst urges Apple to buy Perplexity AI: Wedbush’s Dan Ives says Apple needs to “rip the band-aid off” and acquire Perplexity to stay competitive in the AI race. He claims Apple’s wait-and-see strategy has left it trailing rivals like Meta. ($AAPL, $META)

  • 🥡 Alibaba slides on JD.com’s delivery push: JD.com is launching a $1.4B food delivery campaign to compete with Alibaba’s Taobao and Meituan. Investors weren’t thrilled, sending Alibaba and JD shares lower. ($BABA, $JD)

  • 📉 FICO’s Monopoly Gets Cracked: Regulators approved rival VantageScore for use in Fannie Mae and Freddie Mac loans, ending FICO’s decades-long grip. The news sent Fair Isaac tumbling over 17% as competitors like Equifax, TransUnion, and Experian gained ground. ($FICO, $EFX, $TRU, $EXPN)

  • 🚗 Waymo Rolls Out Teen Rides: Teens aged 14–17 can now book Waymo’s fully driverless cars in Phoenix using special parental-linked accounts. With fewer young people getting licenses, it’s a bet on Gen Z’s transportation habits—and on trust in AI. ($GOOGL, $UBER)

  • 🏦 HSBC Downgrades Sink Big Banks: JPMorgan, Bank of America, and Goldman Sachs fell up to 3% after HSBC issued a bearish call on the sector. The downgrade cited rising funding costs and weakening loan growth as key concerns. ($JPM, $BAC, $GS, $HSBC)

  • 📺 A+E May Be Up for Grabs: Disney and Hearst are weighing a sale or merger of A+E Networks, home to brands like Lifetime and History. The move signals how fast legacy TV assets are losing priority in the streaming-first era. ($DIS, $WFC)

  • 📦 Merck Makes a $10B Respiratory Bet: Merck is acquiring London-based Verona Pharma to expand its pipeline in respiratory treatments like COPD. Investors cheered the deal, sending Verona up 18% premarket while Merck, still down 35% YoY, looks to reignite growth. ($MRK, $VRNA)

PHARMA
Hims & Hers Eyes Canada’s $4B Weight Loss Market

Hims & Hers is going international. The telehealth company announced it’ll begin offering generic semaglutide in Canada starting 2026, jumping on the opportunity after Novo Nordisk let its Canadian patent for the blockbuster ingredient behind Ozempic and Wegovy quietly lapse. The reason? Novo forgot —or opted not to pay a small annual maintenance fee back in 2019. Oops.

It’s a big move for Hims, which is partnering with an approved supplier to navigate Health Canada’s regulatory maze. The Canadian semaglutide market was worth $1.18B in 2024 and could hit $4.03B by 2035, according to Grand View Research. If approval goes through, this would be the first time a generic version of the GLP-1 heavyweight is available anywhere globally.

Novo Fumbles, Hims Pounces

This expansion follows Hims’ recent acquisition of European telehealth provider Zava and marks its debut in the Canadian market. It also deepens the company’s pivot toward weight loss offerings, even after Novo Nordisk cut ties with Hims over concerns about its aggressive promotion of compounded alternatives to Wegovy.

Still, the gap left by Novo's lapse has opened the door to a coming wave of copycats. Sandoz is already seeking approval for a generic version in Canada, and Hims is racing to keep pace. While the U.S. patent on semaglutide doesn’t expire until 2031, Canada’s version becomes fair game this January—and once a patent lapses in Canada, there’s no bringing it back.

Bottom line: One company skipped a $185 payment, and another now stands to reshape the Canadian weight-loss drug market.

Calendar
On The Horizon

Today

Before earnings season officially kicks off next week, we’ll get a few warm-up acts on Thursday. Delta Air Lines, ConAgra, Levi’s, and WD-40 will report—think of it as the preseason kickoff before Wall Street’s main event.

On the macro front, it’s all about jobless claims. Initial claims are easing, but continuing claims are creeping up suggesting some workers are having a harder time landing new gigs. The Fed watches this data like a hawk, so rate-cut hopefuls will be watching too.

NEWS
The Daily Rundown

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