Plus, Bed Bath & Beyond is selling its Cost Plus World Market brand to a private equity firm, Virgin Galactic shares sink after it cut short its latest spaceflight, and fried chicken chain Popeyes is launching beignets.
Stocks were higher to start Monday with the Dow adding 220 points, or 0.7%. The S&P 500 rose 0.6%, while the Nasdaq gained 0.7%.
The first of Pfizer and BioNTech’s COVID-19 vaccine doses are being administered by U.S. hospitals today, the first step in an historic drive to immunize millions of people as deaths near the 300,000 mark and new cases of the coronavirus average around 200,000 per day. The U.S. government plans to distribute 2.9 million doses to states in the week ahead, with the CDC recommending the first shots go to healthcare workers and those in long-term care facilities. FedEx and UPS will play crucial roles in distributing the vaccine, with shipments getting priority access at airports, while CVS and Walgreens are set to start vaccinating residents of nursing homes and assisted-living facilities beginning on December 21. Operation Warp Speed, the federal initiative created to oversee the development of and plan the distribution of COVID-19 vaccines, plans weekly shipments of vaccines as supplies increase. In other vaccine news, Moderna’s shot could be made available as soon as the end of this week, with the FDA set to review the company’s application for emergency use authorization on Thursday.
A bipartisan group of lawmakers from the House and Senate are expected to release the language for a $908 billion coronavirus relief bill today in an effort to spur movement on negotiations for a new aid package. The lawmakers are expected to present language for two separate bills, with one proposal for $748 billion in spending that will include all provisions other than state and local aid and liability protections for employers – the two most contentious issues in negotiating a new package, which will be addressed in the language of a second bill. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi are also expected to speak again today on pandemic relief.
Bed Bath & Beyond shares opened 2% higher this morning on news that the company has reached a deal to sell its Cost Plus World Market brand to private equity firm Kingswood Capital Management. While Bed Bath & Beyond didn’t disclose the financial terms of the deal, it is expected to close before the company’s fiscal year end in February. The sale comes after the company said in July that it could generate nearly half a billion dollars through asset divestitures as part of its restructuring program spurred by slowing sales. “We’ve taken deliberate steps throughout the year to streamline our portfolio and fortify our strategic focus in home, baby and beauty & wellness, and today’s announcement represents the conclusion of this work,” Bed Bath & Beyond CEO Mark Tritton said in a statement.
Virgin Galactic shares are down more than 15% this morning after the space tourism company cut short its latest spaceflight test mid-launch on Saturday due to an engine ignition issue. “The flight did not reach space as we had been planning,” Virgin Galactic CEO Michael Colglazier said in a statement. “After being released from its mothership, the spaceship’s onboard computer that monitors the rocket motor lost connection. As designed, this triggered a fail-safe scenario that intentionally halted ignition of the rocket motor. Following this occurrence, our pilots flew back to Spaceport America and landed gracefully as usual.” Virgin Galactic said it expects to repeat the spaceflight attempt from its operating base at Spaceport America in New Mexico. “Although this weekend’s powered test flight was not a success, the silver lining is that [Virgin Galactic] was able to prove that its built in fail-safe scenarios worked properly enabling [SpaceShipTwo] to glide safely back to Earth without jeopardizing the safety of anyone on board,” Credit Suisse analyst Robert Spingarn said in a note to investors. “The successful triggering of fail-safe scenario should help quell some investor concerns over the risk of a catastrophic event as [Virgin Galactic] begins commercial operations.”
And Popeyes Louisiana Kitchen announced it is adding chocolate beignets to its menu nationwide to lure consumers to its restaurants during the holiday season, pushing owner Restaurant Brands International’s stock nearly 3% higher this morning. The new beignets are part of a broader menu strategy from the fried chicken chain to attract customers with desserts. The beignets—which are stuffed with Hershey’s chocolate before being deep fried—will be available for a limited time starting today and will be available in packs of three, six or twelve. Sami Siddiqui, Popeyes’ president of the Americas, said that the chicken chain tested the new item in October in Boston and a few other Northeastern markets to “particularly strong” reviews from customers, but added that the success of the chocolate-stuffed fried dough pockets is unlikely to surpass the success of its chicken sandwich, which debuted more than a year ago and has delivered double-digit same-store sales growth for every quarter since its launch. “I’ve been in [the fast-food industry] for almost a decade now, and I don’t think I’ve ever seen anything like the chicken sandwich across any brand, so I don’t know if I want to set expectations that high” for the beignets, Siddiqui added.
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FAT Brands Inc (NASDAQ: FAT): FAT Brands shares jumped as much as 81% on Friday after the company announced that it has entered into an agreement to combine with its controlling stockholder, Fog Cutter Capital Group. Andy Wiederhorn, President and CEO of FAT Brands, said, “We have taken a number of steps in 2020 to bolster our balance sheet and ensure that FAT Brands is as nimble and opportunistic as possible, especially in this environment. As we have disclosed in the past, FAT Brands has considered a combination with Fog Cutter as another step in our efforts to simplify our corporate structure and eliminate limitations that restrict our ability to use common stock for accretive acquisitions and capital raising. FCCG holds more than $100 million of net operating loss carryforwards (NOLs), which could only be made available to FAT Brands as long as FCCG owned at least 80% of FAT Brands. With this combination, the NOLs will be internalized at FAT Brands, and we will now have much greater flexibility and optionality in our capital structure.”