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Gilead Sciences (GILD)’s stock price fell after the company reported disappointing results from a study of its lung cancer drug Trodelvy.
According to people familiar with the matter, Berkshire Hathaway Chief Executive Officer Warren Buffett has announced that Citigroup Inc. CEO Jane Fraser is aiming to cut 20,000 jobs by 2026. He reportedly supported recent restructuring plans.
Finally, the stock price of Trump-linked Digital World Acquisition Corporation (DWAC) soared after Florida Governor Ron DeSantis suspended his 2024 presidential campaign.
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor’s note: This article was written by luke carberry morgan.
video transcript
Josh Lipton: Okay, let’s move on and get some trend tickers here. Gilead Sciences’ stock price falls after a new anti-cancer drug fails to improve overall survival rates. Chemotherapy drugs were the centerpiece of Gilead’s $21 billion acquisition of Immunomedics in 2020.
So this is interesting here. This is a lung cancer drug, right? And the report, Julie, did not improve survival for patients with advanced lung cancer.
And from what I’ve read, it appears that this drug is approved to treat some types of cancer, including breast cancer and bladder cancer. And this drug we’re talking about here, to expand a little bit more, is an ADC. This is a type of medicine that we’ve talked about many times on the show. This is because these types of drugs target tumors with minimal damage. It is assumed that the tissue surrounding the tumor is affected. And we’ve seen a lot of excitement around these ADCs. And they’ve facilitated a lot of deals, right? But I think we got some disappointing results on this from Gilead today.
Julie Hyman: Yeah. And there are huge risks involved. We’ll talk about this later in the show when he talks about M&A and the outlook for life sciences. Many of these companies are facing a patent cliff for many of these drugs, putting pressure on them to secure new pipelines.
That’s not necessarily the case with Gilead. Yes, there are some products out there, but as you said, there was clearly a lot of hope in expanding the indications for this drug that is already approved to treat some types of cancer. One Evercore ISI analyst said the decline in Gilead’s stock price was an overreaction.
Josh Lipton: Yes, I saw that. Yeah.
Julie Hyman: –The company still sees growth through its HIV business, not necessarily its oncology space. But that’s not really what investors are focused on today. You probably know that there are various comments floating around in the world after the stock price has fallen so much.
Josh Lipton: Yeah. And today’s share price decline is firmly in the red over the past 12 months.
Julie Hyman: Yeah. Also take a look at Citigroup stock today. Sources told Reuters that Warren Buffett has instructed Citigroup CEO Jane Fraser to continue the ongoing review. This comes a week after Fraser indicated in a conference call that more information about Citi’s next reorganization could be announced this week.
Again, Reuters reported that Fraser said he called the bank’s managing director and also called Buffett. And what’s interesting about this is that Buffett is known to own stock in the bank. But while we knew Berkshire Hathaway owned stock in the bank, we didn’t know how Warren Buffett was directly involved.
Josh Lipton: He’s so into it that we’re having lunch.
Julie Hyman: Apparently.
Josh Lipton: Yeah.
Julie Hyman: Yeah.That’s why we see reactions like this.
Josh Lipton: Yes, it was a great result for City. So if you pull back the chart from early November, it’s up over 30% now. And we know very well, listen, it’s not just the oracle of Omaha. I mean, some of the famous bank analysts we know like that name.
Wells Fargo welcomes Mike Mayo. He most recently worked at Yahoo Finance, and like his front-runner Citi, he expects the stock to double in value over the next three years. As a bank, he says the transformation Mike believes is happening here. And that’s really what Jane Fraser is trying to do to simplify this bank, to streamline it, to drive up profits and hopefully drive up the share price.
Julie Hyman: That’s right, and he actually responded to this Warren Buffett report in a note. “Until now, it has been unclear to us and many investors whether Citi’s stock was really an investment by Warren Buffett or someone else at his company,” he said. And he says, now I basically know.
Josh Lipton: As you can probably tell by now–
Julie Hyman: Yeah.
Josh Lipton: –Eating lunch is enough. we know that much.
Julie Hyman: Yeah. yes.
Josh Lipton: Finally, Digital World Acquisition Company’s stock price has been rising on the strength of recent Republican primary developments. The stock price of the special purpose vehicle that acquired Trump Media has soared following Trump’s victory in the Iowa caucuses and Ron DeSantis’ suspension of his presidential campaign. So that seems to be happening here. Digital World Acquisition, so this is the blank check company that’s trying to take Trump’s media company public, jump today. By the way, it reached its highest level since the summer of 2022.
This move is attracting attention as Governor DeSantis withdrawing from the 2024 US presidential election. Of course he supported Trump. So you can see that the market capitalization of this company is back over $1 billion. By the way, this name is not the only one that is gaining attention in the industry today.
Julie Hyman: So, it’s like a world of mini-meme stocks surrounding former President Trump, and kind of moving in tandem with that.
Josh Lipton: Yeah.
Julie Hyman: –There are also developments related to him. There’s Digital World Acquisition (we call him DWAC after its ticker). Phunware is the software company that worked on his 2020 reelection bid.
Josh Lipton: I didn’t know about it until Bloomberg covered it.
Julie Hyman: Yes, this is something we’ve seen pop up on trending ticker pages before when there’s a development. So it’s essentially a penny stock, but that’s why I call it kind of memetic, right?
Josh Lipton: Yeah.
Julie Hyman: Meme stocks. There was some other good news in Rumble today, which we’ll get to later. But again, some of these companies have this kind of mini-meme feel to them. Unlike DWAC, this is not the case. How long have they actually been trying to take over Truth Social?
Josh Lipton: I agree.
Julie Hyman: And the deadline keeps getting pushed back. SPACs typically have an expiration date. If the acquisition is not made by that deadline, the company must return the money to investors. However, DWAC continues to push that deadline forward.
Josh Lipton: And check it out. There is another name here: PSQ. You probably run a marketplace that connects freedom-loving American buyers and sellers.
Julie Hyman: Oh, of course.
Josh Lipton: Julie, that was also high in the industry. You say Trump is like pulling a bunch of celebrities to the top in today’s industry. And we have some smart analysts who can tell us more about Mr. DeSantis’ exit and what exactly it means for the election later in the hour.
Julie Hyman: Yes, I’m going to talk to Henrietta Treize.
Josh Lipton: That is correct.
Julie Hyman: She is one of them. We’ll be talking to Veda Partners, managing director of economic policy, about the election later in the show, the implications for investors, and what we see policy-wise for both sides. So that’s what I’m looking forward to.
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