Monday's Headlines: Ford Announces a Dramatic Restructure
Here were the biggest movers in the MyWallSt shortlist on Friday:
Moving Up ⬆️
Lemonade (LMND) +4.4%
Stitch Fix (SFIX) +2.3%
Align Technology (ALGN) +2.1%
Trip.com Group (TCOM) +1.5%
Moving Down ⬇️
Axos Financial (AX) -5.3%
Tesla, Inc. (TSLA) -4.6%
Ericsson (ERIC) -4.5%
Netflix (NFLX) -4.5%
Farfetch (FTCH) -4.5%
Here are the stories that you need to know ahead of market-open today, Monday the 26th of September.
Ford to Restructure Supply Chain to Dampen Rising Costs 🚙
Ford (F) has announced plans to dramatically restructure its supply chain. The move comes just days after the U.S. automaker reported roughly $1 billion in unexpected supplier costs for its third quarter. That news saw Ford stock have its worst trading day in 11 years.
The cost of raw materials has shot up in recent years due to global supply chain pressure and general inflation. That has led to critical components like semiconductor chips being in short supply.
The company’s restructuring plans will be led by current CFO John Lawler on an interim basis. Meanwhile, management will look for a candidate to fill its newly created position of chief supply chain officer.
In a press release, the company said:
“Ford is transforming its global supply chain management capability to support efficient and reliable sourcing of components, internal development of key technologies and capabilities, and world-class cost and quality execution.”
The Ford Motor Company is one of the oldest businesses on the US exchanges, having been founded by Henry Ford over 119 years ago. However, the company has been accused of missing the boat when it came to the move to electric vehicles.
CEO John Farley has made electric vehicles a priority for the business and said earlier this year that they were on track for its near-term target of producing 600,000 EVs per year by the end of 2023.
DocuSign names new CEO ✍️
E-signature pioneer DocuSign (DOCU) has finally named a new CEO. Ex-Google Executive Alan Thygesen will replace outgoing CEO Dan Springer in the top job at the firm. The appointment ends a three-month search for a new leader, with Thygesen commencing his new role on October 10.
Thygesen’s resume is impressive with 12 years spent at Google, most recently as President of Americas and Global Partners, where he oversaw $100 billion in advertising revenue. He will have to harness all of his experience and industry knowledge to turn around a DocuSign that is a ways away from its former glory. Down more than 66% since the start of the year and over 80% from recent all-time highs, the company saw a dramatic pull-forward during the pandemic that is now coming home to roost.
Slowing sales, continued losses, over-expansion, and a rapid shift in market sentiment away from unprofitable tech have led to the downturn the company now finds itself in. While it will be no easy feat, bringing the company towards a more sustainable growth model and focusing on profitability will likely be the new CEO’s number one priority. For DocuSign investors, the hire is a welcome sight as the uncertainty abates and it can initiate a new strategy to ascend from its current nadir.
Cano Health Spikes On Buyout Rumours 🩺
Shares of primary care center operator Cano Health spiked by as much as 59% late last week following the emergence of news that both CVS Health and Humana Inc. are circling the company and considering a purchase.
There may even be more players considering an acquisition unbeknownst to the public, however, the ball appears to be firmly in Humana’s court as a 2019 agreement between both parties gives Humana first refusal in the event of any sale.
This deal, should it come to fruition, would be the latest in a proverbial arms race within the healthcare sector. Amazon’s purchase of One Medical in July was followed by CVS Health’s acquisition of Signify Health just this month.
Cano Health provides a number of primary care services to customers across the United States. As of June this year, it operated over 140 owned medical centers while also having affiliate relationships with more than 1,000 physicians. It went public via SPAC in 2020 and was initially valued at around $4.4 billion.
Since then, the company enjoyed a relatively successful first year on the market, before tumbling in the latter half of 2021. It now sits 15% lower than its original price and is down over 44% from all-time highs witnessed in February of 2021. This year, two separate activist investors have taken stakes in the company and pushed for its sale, with one pointing to the market’s unfavorable view of companies participating in SPACs in recent years as a potential reason.
A deal, should it go through, is expected to be struck over the next number of weeks if negotiations continue at their current pace.