over 1 year ago • 3 mins
Amazon announced on Thursday that it’s agreed to buy healthcare provider One Medical for nearly $4 billion.
What does this mean?
Amazon’s been moving into the healthcare space for a while now, having launched – among other things – an online drug store following a $1 billion acquisition of mail-order pharmacy PillPack in 2018. And it continued down that path on Thursday, announcing that it’d be buying One Medical for $18 a share – around 75% more than it was worth before the deal was announced. The move gives Amazon a lot to work with: One Medical offers round-the-clock digital health services to nearly 800,000 fee-paying members, while its 188 offices across 25 markets gives it an expansive physical presence too. The ecommerce giant, for its part, said its goals were noble: it’s planning to use the company to make healthcare more affordable and accessible for everyone.
Why should I care?
For markets: Saving patients kills companies.
Amazon’s announcement doesn’t bode well for Walgreens Boots Alliance and CVS Health, both of which have been adding primary care services to their stores recently. Another competitor in the space is never good news, let alone when that competitor has the sheer size and staying power to cut prices, invest heavily in the product, and dominate the market. And since even trying to compete could harm profits even more, investors sent both companies’ stocks down after the news.
Zooming out: The ECB stops fighting it.
No self-serving American would turn up their noses at cheaper healthcare right now, not while they’re being squeezed by rising prices and interest rates. That’s a double whammy Europeans are about to become very familiar with: the European Central Bank increased rates by 0.5% on Thursday – its first hike in 11 years, and the biggest since 2000. There could be more to come too, with the central bank warning that more hikes will be needed in the next few months if it’s going to get a handle on inflation.
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South Korean carmaking giant Hyundai posted its best quarterly profit since 2014 on Thursday.
What does this mean?
The tail-end of last quarter wasn’t an ideal one for Hyundai, with strikes in South Korea making production next to impossible. But the carmaker hit upon a canny solution, reducing discounts on the vehicles it did have to sell. Drivers were especially keen on its highly profitable SUVs and luxury models, while booming sales of its flagship EV helped the segment’s total sales climb almost 50% from the same time last year. Throw in a fragile South Korean won that made its overseas earnings worth more, and Hyundai’s profit came in 56% higher last quarter. Better still, the carmaker said it’s finally seeing signs that chip and component shortages are letting up, and that it could step up production for the rest of the year as a result.
Why should I care?
The bigger picture: Hyundai’s a realist.
Still, Hyundai is more than aware of the challenges going forward. For one thing, there’s no guarantee that strong demand will stick around as interest rates tick up, which will make financing a car that much more expensive. Inflation isn’t going to help on the purchasing power front, either. And for another thing, the carmaker admitted it was expecting fierce competition to push up its marketing costs, and said it’ll have to foot the bill for higher salaries if it wants to prevent any more strikes.
Zooming out: The sky’s the limit.
Hyundai doesn’t just want to rule the road: it’s one of the first global carmakers to start developing flying taxis, arguing that its expertise in mass production, interior design, and customer experience will give it an edge. The vehicles are expected to start test flights in 2025 and hit the US market by 2028, and Martin Scorsese’s long-awaited sequel – “Flying Taxi Driver” – is expected to follow shortly after.
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