Morning Brew Daily: Episode Summary Title: Buy Now, Pay Later Impacts Credit Score? & Novo Nordisk Breaks Up w/ Hims & Hers
Hosts: Neal Freyman & Toby Howell
Release Date: June 24, 2025

1. Vera C. Rubin Observatory's Breakthrough in Astronomy

[01:10] Neal Freyman:
Neal opens the episode by highlighting the groundbreaking achievements of the Vera C. Rubin Observatory. Described as a "cutting edge telescope," it recently released its first deep-space images, boasting a digital camera with 67 times more megapixels than the iPhone 16 Pro. The exceptional resolution, capable of capturing a golf ball on the moon, necessitated the use of 400 Ultra HD TV screens to display a single image.

Toby Howell adds that the observatory is already proving its prowess by discovering 2,100 new asteroids within just 10 hours of operation, dramatically surpassing the usual annual rate of 20,000. The location in the Andes Mountains, Chile, is strategically chosen for its altitude, dryness, and darkness, critical factors for optimal telescope functionality. Toby humorously remarks, "If a dark bus ride is what it takes to find some aliens, then that's a pretty worthy trade."

2. Buy Now, Pay Later (BNPL) and Its Influence on Credit Scores

[05:03] Neal Freyman:
Neal delves into the integration of Buy Now, Pay Later (BNPL) loans into credit scoring models by Fair Isaac Corp. (FICO). This marks the first inclusion of BNPL in credit scores, aiming to address the previously hidden "phantom debt" arising from BNPL services. FICO's new model seeks to provide better insights into consumer creditworthiness by incorporating these short-term loans.

[06:10] Toby Howell:
Toby emphasizes the exponential growth of BNPL transactions, projected to reach $108 billion in the US for 2025, up from $94 billion the previous year. He underscores the murkiness surrounding BNPL, noting that almost half of BNPL users encounter money issues, primarily due to overspending. He cites Klara's rising default rates, currently at 0.5%, highlighting the necessity for transparency in consumer spending patterns.

[06:55] Neal Freyman:
Neal poses a critical question: "Will this be a credit builder or a credit buster?" He explains that responsible use of BNPL could boost credit scores for users without traditional credit cards, potentially bringing more individuals into the credit system. FICO's simulations indicate that the majority of consumers with multiple BNPL loans could see their scores improve or remain stable, contrary to initial fears that BNPL might harm credit health.

3. Novo Nordisk and Hims & Hers Partnership Collapse

[07:54] Toby Howell:
Toby reports on the tumultuous relationship between Novo Nordisk and Hims & Hers, a telehealth company. Novo Nordisk, renowned for producing Wegovy, ended its partnership with Hims & Hers after only two months. The split stems from accusations that Hims & Hers engaged in deceptive marketing by promoting compounded weight loss drugs, diverging from their agreement to cease mass compounding.

[10:08] Neal Freyman:
Neal provides context, explaining that Novo Nordisk aimed to leverage partnerships with telehealth platforms to promote their branded product, Wegovy, over cheaper compounded alternatives. However, Hims & Hers continued offering compounded shots for personalized dosages, leading to Novo Nordisk's decision to terminate the partnership. This fallout caused Hims & Hers' shares to plunge 34%, reflecting investor disappointment.

[11:05] Toby Howell:
Toby discusses Novo Nordisk's broader strategy amidst competitive pressures from Eli Lilly's Manjaro and Zypade. With Novo Nordisk experiencing internal challenges, including a recent CEO transition and a 20% stock decline, the dissolution with Hims & Hers signals a precarious period for the company's market position.

4. AI's Disruptive Role in Job Applications and Recruiting

[11:56] Neal Freyman:
Neal shifts focus to the burgeoning issue of AI's impact on job applications. The New York Times reports a 45% spike in LinkedIn applications, reaching 11,000 submissions per minute. This surge is fueled by generative AI tools that streamline the application process, with candidates using AI to craft optimized resumes and even employing autonomous AI agents to apply for jobs on their behalf.

[13:27] Toby Howell:
Toby elaborates on the challenges this presents for both job seekers and recruiters. He cites a tech company's remote role that received up to 1,200 applications, making it difficult for hiring managers to discern genuine candidates. The prevalence of AI-generated applications leads to a "sea of sameness," complicating the recruitment process.

[14:18] Neal Freyman:
Neal discusses the paradox of using more AI to solve the AI-induced problem. Companies like Chipotle and HireVue are implementing AI-driven tools for screening and scheduling, while LinkedIn introduces its own AI agent to assist in recruitment. However, Neal expresses skepticism, suggesting that this approach may lead to an "AI vs. AI" scenario with diminishing returns.

[15:08] Toby Howell:
Toby highlights potential legal ramifications, such as discrimination claims against AI-driven applicant tracking systems. He references a North Carolina IT professional's lawsuit against these systems for alleged age and race discrimination, posing significant risks for recruiting software providers.

5. Trends: The Resurgence of SPACs (Special Purpose Acquisition Companies)

[17:14] Toby Howell:
Toby introduces Toby's Trends, focusing on the comeback of SPACs. SPACs, which experienced a boom during the pandemic, are seeing renewed interest with IPO proceeds this year at $11.2 billion, a substantial rise from $1.8 billion the previous year. Despite not reaching the heights of 2021, the uptick suggests potential stabilization and renewed investor confidence.

[18:57] Neal Freyman:
Neal analyzes the factors driving the SPAC resurgence, including a more favorable regulatory environment under President Trump's administration and a laissez-faire approach from the SEC. He notes that traditional financial firms like Goldman Sachs are re-entering the SPAC market after a three-year hiatus, potentially triggering a broader revival across the industry.

[19:59] Toby Howell:
Toby reflects on the historical context, recalling the SPAC bubble burst in mid-2022. He observes that current SPAC activities are being propelled by ventures like Anthony Pompliano's Bitcoin treasury company, indicating a speculative yet vibrant interest. However, he cautions that the industry might be on the brink of another boom and bust cycle.

6. Additional Headlines

a. New York's Historic Partnership with Nuclear Power

[21:42] Neal Freyman:
Neal reports that New York Governor Kathy Hochul has directed the construction of a large nuclear power facility upstate, aiming to produce 1 gigawatt of new nuclear energy—enough to power approximately 1 million homes. This initiative marks the first new US nuclear plant in over 15 years and is part of New York's strategy to ensure reliable and affordable utility costs, especially after the closure of the India Point nuclear plant.

Toby Howell adds that Hochul's commitment stems from the significant energy gap left by closing the India Point plant. She is prioritizing nuclear energy to replace fossil fuels and meet the rising electricity demands from data centers, emphasizing the importance of energy reliability for both residents and businesses.

b. Zillow vs. Compass: A Battle for Online Real Estate Dominance

[22:31] Toby Howell:
Toby discusses the legal battle between Zillow and Compass. Compass has filed a lawsuit alleging that Zillow is attempting to maintain an illegal monopoly over online home listings by imposing a 24-hour ban on homes not listed on Zillow. In response, Compass launched Private Exclusives, offering listings exclusive to its platform.

[24:08] Neal Freyman:
Neal explains the contention surrounding online real estate listings, noting that nearly 100% of homebuyers use the internet in their search process. He highlights the strategic moves by Compass to carve out a niche, while Zillow insists on having comprehensive listings, posing a dilemma for consumer choice and market competition.

c. Financial Security and Inflation Impact

[24:49] Toby Howell:
Toby cites Bankrate's Financial Freedom Survey, revealing that nearly 50% of adults feel they need to earn over $100,000 annually to achieve financial security. For some, this figure exceeds $200,000, starkly contrasting with the median household income of $80,000 in 2023. He attributes this disparity to persistent inflation eroding purchasing power.

[25:31] Neal Freyman:
Neal underscores the impact of inflation, illustrating how a stagnant salary from January 2020 to April 2025 effectively reduces purchasing power by $24,000. He notes that 77% of Americans now report feeling financially insecure, up from 72% in 2023, even as inflation rates have moderated to 2%. Neal suggests that this financial anxiety may encourage more individuals to seek salary increases.

Conclusion

In this episode, Neal Freyman and Toby Howell navigate through a spectrum of pressing topics—from astronomical breakthroughs and financial product impacts to corporate partnerships and the evolving landscape of job recruitment. They provide insightful analysis on how technological advancements and economic shifts are shaping both individual financial health and broader market dynamics.

Notable Quotes:

• "If a dark bus ride is what it takes to find some aliens, then that's a pretty worthy trade." — Toby Howell [02:05]
• "Will this be a credit builder or a credit buster?" — Neal Freyman [06:55]
• "We are creating more choice by providing an alternative to Zillow." — Compass Representative [24:49]

For more insights and daily news on business and the economy, tune into Morning Brew Daily available on all podcast platforms and YouTube.