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Many employees can't afford a hefty medical bill that pops up out of the blue. But it happens. And employees who are financially stressed are understandably more likely to be distracted at work, costing their employers greatly in lost productivity. Luckily, Aflac plans help with out of pocket expenses not covered by health insurance and can be offered at no direct cost to businesses. Learn more@aflac.com Frumarkets that's aflac.com Frumarkets Publicist
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Group the largest advertising company in the world. We explore what its newest two and a half billion dollar acquisition demonstrates, but the company's push into AI Monday's mega merger, a new tie up, could become the largest energy deal in US History. But the big question are regulators on board and quote misguided and outdated? Lululemon just took its battle with founder Chip Wilson public and then some with some choice words on Monday, May 18th is brew markets Daily and Diane Barry. More market details to but first, heat up the popcorn and pull up a chair because a major corporate showdown is unfolding at athletic apparel giant Lululemon market cap $14 billion and a share price that's dropped a whopping 60 plus percent over the past year. Founder Chip Wilson is now in a very public battle with the company that he built and shareholders are being forced to choose sides. The dispute centers on what's known as a proxy fight, where investors try to win enough shareholder votes to reshape a company's board of directors. Wilson, who founded Lululemon in the late 1990s and still owns nearly 9% of the company, says the brand has lost its edge, pointing to slowing sales growth amid mounting competition from rivals like Aloe Yoga and Biore. Well, Wilson is proposing three outside directors, all of whom have backgrounds in some combination of branding, sports media and consumer engagement. These include former executives from on the running shoe business, from ESPN and from Activision Publishing. His argument is that Lululemon needs stronger storytelling, sharper merchandising and a return to the premium athletic identity that originally made the brand so successful. Specifically interesting quote here. Wilson has criticized Lululemon for deprioritizing creative excellence at the altar of efficiency. Well, the current board is now stepping on up backing a very different slate of directors and really going to bat for them in public by defending their choices. The current Lululemon board has lined up executives with experience in large scale retail operations, governance and corporate turnarounds, including the former Levi Strauss CEO Chip Berg. The company says its nominees are better equipped to guide a global retailer through a period of slowing growth and increased competition. And as for Wilson's pick from on the board points to a conflict of interest, saying that it's uncomfortable that Marc Mara stepped down only about a year ago as the co CEO of the direct competitor to Lululemon and still has a personal stake in his former company that makes up a considerable portion of his net worth. That's a quote from that board's letter. Well, today the battle escalated sharply because in its public letter to shareholders, Lululemon accused Wilson of pushing what it called outdated perspectives. The company appears to be referencing Wilson's criticism of the brand's expansion strategy and its broader push toward mass market collaborations. Wilson has argued that Lululemon has diluted its premium image by moving too far away from its original core customer, while the proxy fight is also intensifying scrutiny around the incoming CEO of Lululemon, Heidi o', Neill, a long time prior Nike executive who has recently tapped to lead the company. Some investors have questioned whether another major brand insider is the right choice right at a time when consumers are shifting away from legacy athletic labels, noting also that her tenure at Nike was during the OG's descent to what is now its own turnaround phase. But the board is defending o' Neill as a proven global leader with deep operating experience and product innovation direct to consumer strategy and international growth during Nike's peak areas that it says are critical for Lululemon's next phase. Well, there are big dates coming up in the calendar because shareholders are expected to vote on the competing board slates at the company's annual meeting next month. And unless the two sides can reach a last minute settlement, it is going to go down to the wire. And for now, the future of one of the world's biggest athletic apparel brands may come down to just one question. Should Lululemon fundamentally return to its founder's original vision or have the courage and the gumption to move beyond it? We're going to keep on watching. Well, coming up in a moment, a spin through the headlines that are moving the markets today, including what Berkshire Hathaway's been buying and selling under its new CEO. But first, this episode is brought to you by Charles Schwab. Timing the Market, Fighting Inflation, Balancing Risk no one says financial decisions are easy. In fact, they can be tricky. And often the forest in your head can lead you sideways. Financial Decoder an original podcast from Charles
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Schwab can help join host Mark Re, head of Schwab center for Financial Research, as he offers modern strategies to help combat the wait. What in your head like overconfidence loss aversion and recency bias that may cloud your investing decisions. Listen@schwab.com financialdecoder or wherever you get your podcasts.
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Well, markets have been mixed today. That's as investors weighed the outcome of President Trump's trip to China last week, the White House did claim victory on one particular front, and that's the farmers saying Beijing has agreed to purchase roughly $17 billion worth of U.S. agricultural products annually through 2028. Meanwhile, though, geopolitical tensions are back in focus. Over the weekend, President Trump warned that the clock is ticking for Iran to reach a peace agreement, fueling concerns that escalating tensions in the Middle east could again spiral into a broader conflict. Now a quick spin through some of the other headlines that are moving the markets.
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Kicking off Monday with an M and a story with the announcement that France's Publicist Group is is set to acquire US data platform LiveRamp in a $2.5 billion deal. The acquisition of San Francisco based Liveramp will give Publicist new technology designed to help clients build AI agents, opening up a new growth path for the advertising giant.
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Publicist has been reshaping its portfolio around AI as major ad companies face growing pressure to prove they can remain relevant in a marketing landscape that's increasingly driven by tech. Investors did appear to welcome the move, Publicist shares rising about 7.5%, Liveramps surging more than 27%.
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Meanwhile, in biotech, shares in Regeneron ticker regn tumbling over 10% after a late stage trial for the biotech's experimental skin cancer drug missed its main goal. The trial, focused on patients with advanced melanoma, did not reach statistical significance in improving progression free survival. An analyst called the results quote worst
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case scenario did, though, see a sell off, not as deep as it could have been. And that's because regeneron does have 15 other drugs in late stage trials. So while this was a painful mess, the company's somewhat diversified pipeline does run deeper than just one product. Well over now to Berkshire Hathaway investors continuing to react to Berkshire's stock trades. That's as big as that's after Warren Buffett stepped down as CEO, leaving all eyes on his successor, Greg Abel, to figure out what style of investing he's going to demonstrate now that he's left to his own devices.
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In the company's first 13F filing since the change, Berkshire disclosed that in the first quarter it completely exited its position in UnitedHealth after having purchased 5 million shares last year amid the healthcare company sell off shares in UnitedHealth are trading down 1.5% today. Another notable exit? Berkshire officially dumping its remaining stake in Amazon after unloading 77% last quarter. In the recent quarter, Berkshire opened up a new $3 billion position in Delta Airlines and 55 million in Macy's. Both Delta and Macy's saw their stock price up about 1 1/2% in afternoon trading. Of course, Warren Buffett remains the executive chairman of Berkshire Hathaway, and Abel has said he continues to consult the 95 year old Buffett on investment decisions.
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One other investment of note, Berkshire boosted its stake in Alphabet. That's ticker G O O G or goog of course, after the original asset at Google, up from nearly 18 million shares at the end of last year to 58 million shares in the most recent quarter, holding a stake now worth about $23 billion. And its value is on the rise or has been recently Alphabet roughly 2% away from a magic $5 trillion market value with its shares on pace for a record closing high today. It's been 87 days only since Alphabet first closed above the $4 trillion milestone, meaning the company is poised to make a trillion dollar market cap climb in under 90 days. Well, let's take a quick break and when we come back, we unpack the proposed $67 billion deal between next Era Energy and Dominion Energy and discuss how it could reshape the US Power landscape.
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This episode is brought to you by Charles Schwab. Timing the market, hedging against inflation, Balancing Risk investing is about more than math. It takes both sides of your brain, and those confusing mental traps can sometimes lead you astray. Financial decoder and original podcast from Charles Schwab can help join host Mark Riepe, head of the Schwab center for Financial Research, as he breaks down practical strategies to help outsmart the mental traps like overconfidence, loss aversion and recency bias that often cloud your investing decisions. Listen@schwab.com financialdecoda or wherever you get your podcasts
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Well, it's a merger Monday with the announcement that Next Era Energy will buy Dominion Energy in an all stock deal currently valued at nearly $67 billion. We'll get into the details in a moment, but just wanted to look first at the backdrop of increased electricity demand from data centers. That's the rationale for the tie up. Plus, of course, some questions around what this may mean for utility bills for residential customers. Well, the deal coverage in the news has come with a ton of superlatives. It would be the largest power sector deal on record for the United States and would create the world's largest regulated electric utility business. The combined company, which would operate under the Next Era name, will serve 10 million utility customer accounts across Florida, Virginia and the Carolinas and generate 110 gigawatts of power. Well, as to the deal, Nextera shareholders would own roughly 75% of the combined entity. So, John, give us some background on the two players here and what investors are keeping an eye on.
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All right, well, let's start with the company being purchased. That's Dominion Energy. Great ticker ticker D on the New York Stock Exchange. Market cap just shy of $60 billion. And the key here is that Dominion Energy, which serves the Mid Atlantic States, is the utility currently responsible for powering the largest concentration of data centers in the world in what is being called Data Center Alley in Loudoun County, Virginia. That's just a few miles outside of Washington, D.C. and I grew up in this area. And for some context, in the 1990s, one of the first major Internet exchange points for the whole east coast was established there. And Loudoun became home to the world's densest intersection of fiber networks. So this buildup has been going on for years. It made it a destination for ISPs, telecoms, cloud providers, all looking for that close proximity to the fiber to minimize latency. And so these data centers have been under construction for years. For more than 14 consecutive years, there has not been a single day without a data center under construction in Loudoun County. So even though we've been hearing about the AI boom, this has been coming for a long time. There are now hundreds of data centers in the region spreading out over tens of millions of square feet. And Northern Virginia Market is the first in the world to surpass 1 gigawatt of data center capacity. That is what Dominion Energy is powering. And the business that Nextera wants to
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get into, well, on its own basis. Nextera is not to be sneezed at in terms of scale. It's the biggest renewable energy developer in the United States with a portfolio of natural gas and nuclear generation assets and it is a utility providing half of Florida's power to through Florida Power and Light Ticker nee on the New York Stock Exchange market cap over $190 billion, making it the largest utility in the S&P 500. Well, in a statement today, NextEra CEO John Ketchum said that, quote, electricity demand is rising faster than it has in decades. Projects are getting larger and more complex. Customers need affordable and reliable power now, not years from now. So that sense of urgency really coming about in the rationale for this deal and the reason why Next Next era is leaning in aggressively here.
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Absolutely. And he pointed out that this deal would in his mind, lead to affordable, reliable power now. And demand is rising and so are prices. Estimates that utility bills in Northern Virginia are up 30% in the past five years. There is growing concern and conversation that these data centers are leading to higher prices for residential customers. And Virginia swore in a new governor in January, Abigail Spamberger. And just last week she announced a suite of bipartisan bills looking to lower energy costs in the state, saying Virginians know energy costs have been skyrocketing. The legislation we're signing today represents solutions we can provide at the state level. So she has made it a focal point of her administration to lower energy prices. And it's a reminder that before this merger goes through, it will need approval from the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and state regulators in Virginia, North Carolina and South Carolina. So state politicians may not like the optics of more concentration in the energy sector. Maybe it would lead to lower prices through scale or maybe it would prioritize these data centers over residential power bills. So, Ann, I'm wondering if investors are confident that these approvals will be gained and that the merger will go through.
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Well, we do see shares in Dominion Energy coming up around 8%. So those investors are pretty happy and certainly hopeful that this is going to go into effect. Shares in Next era down though as much as 7% today. Looks as though shareholders over at next year are not so happy about either the valuation or the potential distraction that this could prove out to be. Well, if this deal is approved and does go ahead, it would be the second largest transaction in 2026, following of course, that bumper 250 billion tie up between SpaceX and X AI. We're going to keep on watching while it's 4pm on the east Coast. The markets have closed and we don't have a ticker tape. But instead we'll throw it over to our human ticker, our producer, John.
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The market's bouncing around throughout the day, with the S&P 500 finishing flat, the Dow finishing up 3.10of a point, and the Nasdaq down half a percent for the day.
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That's it for today's Brew Markets Daily.
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Brew Markets Daily is hosted by Anne Barry and produced by John Curto, Tarkab Del Latif, Aveni Laroy and Emily Milliron. Our technical director is Uchena Waoghu, Brittany Dutaco is our audio engineer and the president of Morning Brew Inc. Is Devin Emery. Wake up tomorrow with the Morning Brew newsletter and tune in to Neil and Toby on Morning Brew Daily. We'll see you back here tomorrow. Same time, same place.
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You can't reason with the sun. Trust us, we've tried. This summer, it's time to put that angry ball of fire on mute. Columbia's Omnishade technology is engineered to protect you from the sun's harsh rays that can burn and damage your skin. The sun is relentless, but so is our gear. Level up your summer@columbia.com to spend more time outside and less time slathering on aloe lotion. You're welcome, Columbia. Engineered for whatever.