💸 A $24 billion grocery haul

What’s going on here?

Sycamore Partners crossed a big-ticket item off its shopping list: the private equity firm agreed to buy Walgreens for nearly $24 billion by the end of the year, giving it just enough time to make room in the pantry.

What does this mean?

A decade ago, Walgreens was a $100 billion company. But that was back when you had to haul your sickly body to a physical store to get emergency pick-me-up drugs, and the word “corona” conjured up memories of nothing but beer. Since then, the drugstore chain has handed over market share to ecommerce-focused rivals and struggled to adapt to pandemic-induced changes in shoppers’ behavior. So now, Walgreens is nursing a lowly $9 billion valuation. Although, shareholders might get a small consolation prize: Sycamore will buy the firm for 8% more than Thursday’s price.

Why should I care?

For markets: Sycamore’s putting its ass…ets on the line.

This deal is a “leveraged buyout” (LBO) – meaning that Sycamore is borrowing much of the money for the purchase, using its assets as collateral. And it’s one of the biggest in years. Now, LBOs can be risky: the idea is to buy a flailing firm, cut costs, and restructure the business to then sell it for a profit. And that’s all more easily achieved by taking the company private – away from Wall Street’s prying eyes. But if the buyer can’t get the job done, it’ll feel the pinch on its own bottom line.

The bigger picture: Wall-to-wall challenges.

The retail industry is a tough place to do business right now. Many US retailers are concerned that escalating tariffs will pump up the cost of supplies and further slim their already squeezed margins. Walgreens’ rival Walmart has taken to bargaining, desperate for Chinese suppliers to offset taxes by reducing prices. But that’s a privilege: smaller firms just don’t have the order numbers to pull off such negotiations.

What’s going on here?

The US president signed an executive order to create a strategic bitcoin reserve on Thursday, and investors didn’t hold back their initial thoughts on the “strategy” part.

What does this mean?

The government had previously teased a strategic crypto reserve, exciting investors who believed that would be followed by a shopping haul of five key cryptocurrencies. But so far, the grand plan seems to be little more than a rebrand. The order did establish a US bitcoin reserve – but for now, it’ll only hold the $17 billion worth of bitcoin previously seized by law enforcement. So without any sign of the government buying more crypto, investors initially retreated from bitcoin, ether, XRP, solana, and cardano.

Why should I care?

Zooming in: The president’s been burned before.

The president’s own crypto venture – the aptly named $Trump memecoin – is reported to have brought in at least $350 million. On top of that, digital wallets linked to the project raked in millions from token sales and fees. But not everyone will be happy with their purchase: the memecoin’s price has been anything but consistent, reaching a high of $75 before plummeting to $13. Despite the volatility (and the criticism of mixing governance with personal profit), the president still backs crypto. He recently hosted major sector leaders and reportedly wants the digital currencies to play a bigger role in new US policies.

For markets: Treat ‘em mean, keep ‘em… uh, not very keen.

It’s not just the crypto reserve keeping investors on edge. In yet another policy one-eighty, the president delayed tariffs on Canadian and Mexican imports – just days after imposing sweeping 25% duties. And if there’s anything investors hate, it's uncertainty. So it’s no wonder that the S&P 500 and Nasdaq have fallen to rest near their 200-day moving averages. But if they dip below that point, there could be a mass exodus.