The Weekly Scan November 22, 2021

Welcome to the Weekly Scan. Here’s what we’re following for the week of November 22, 2021.

Closing its doors.  Pharmacy chain CVS will shutter 900 stores over the next three years. Meanwhile, CVS will add health services such as diagnostic testing, mental-health services, and hearing exams at the remaining locations. The company has added dozens of stores since 2018, in order to compete with Walgreens Boots Alliance, which has closed 600 locations since 2018. CVS reportedly plans to offer laid off workers employment elsewhere in the company.

• The takeaway: CVS and Walgreens have attempted to increase their presence in health care in recent years. CVS acquired health insurance giant Aetna in 2018, and Walgreens acquired a stake in medical service provider VillageMD. Walgreens and CVS have also been responsible for delivering one-third of the Covid-19 vaccine doses administered nationwide to date.

Wall Street Journal

When the chips are down. General Motors (GM) announced it will form a partnership with seven companies to design and build new semiconductors. The companies include integrated circuit makers such as Qualcomm, STMicroelectronics, Taiwan Semiconductor Manufacturing (TSMC), Renasas, NXP Semiconductors, Infineon, and ON Semi. The partnership is an attempt to address the global microchip shortage in the U.S. and throughout North America. Before GM made its announcement, Ford Motors said it would work with GlobalFoundries, another manufacturer of semiconductors, to make chips for Ford and other automakers. 

• The takeaway: The auto industry has been slammed by the semiconductor shortage, causing manufacturers, such as GM and Ford, to build and pause production of vehicles. Since early 2021, chip makers have experienced shortfalls in manufacturing  microprocessors used in most products today, including cars, 5G phones, and most consumer electronics. A recent surge for laptop computers and other work-from-home technology has contributed to the industry squeeze,  causing costs to rise.

Reuters

The Oprah effect. Talk show host Oprah Winfrey, actor Reese Witherspoon, and Bumble dating app founder Whitney Wolfe Heard have reportedly combined forces with investment firm Blackstone to acquire a majority stake in the popular women’s shapewear brand, Spanx. Blackstone and Spanx are reportedly planning to build an all-female board of directors. The company’s founder, Sara Blakely, put the company up for sale earlier this year and will maintain significant equity in the business. Blackstone reportedly values Spanx at $1.2 billion. 

• The takeaway: Winfrey and Witherspoon have partnered with Blackstone on previous projects. Winfrey worked with Blackstone to invest in the oat milk brand Oatly, which had its public offering earlier in 2021. Blackstone acquired Witherspoon’s film production company, Hello Sunshine, in August 2021, and Bumble in 2019. Bumble went public earlier this year.  

New York Times

Seeing green. Fast-casual chain Sweetgreen went public last week, one of more than a dozen food companies to go public since July 2020. Sweetgreen priced its initial public offering (IPO) at $28 per share, but the stock opened at $52 per share. The vendor sold 13 million shares on its first day of trading; by the end of the day,, the share price was up 76%. Sweetgreen raised $364 million from the IPO. The company, which offers healthy lunch options, bills itself as “the McDonald’s of our generation,” according to CEO Jonathan Neman.

• The takeaway: Many of the food businesses that have gone public in the last year have seen shares take a hit after a big debut. Shares in companies such as Oatly, Vital Farms, Krispy Kreme, Utz, and more have fallen since they entered the market ( DoorDash, Portillo’s, and Dutch Bros. have proved to be exceptions so far). Sweetgreen took a hit during the pandemic, reporting a net loss of $141.2 million last year. Same-store sales fell 26% during that year, compared to a 15% increase the previous year. However, as of September 26, 2021, same-store sales have risen 21%, reducing the company’s loss to $86.9 million, from $100.2 million in the previous year. The company has also pivoted to a digital-first approach,from which two-thirds of its revenue originates.  Check out other November IPOs with Stash’s IPO calendar.

CNBC, Forbes

 Here’s what we covered in last week’s Scan: 

• Elon Musk sells roughly $5 billion worth of Tesla stock. 
• Inflation jumps 6.2% in October, the sharpest increase in nearly 30 years. 
• Industrial conglomerate General Electric (GE) announces that it will spin off into three companies.
• More than 10,000 workers at Deere and Co. strike.

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