Healthcare Giant Weighs Breakup Amid Investor Pressure
CVS Health, the largest healthcare services provider in the US, is reportedly exploring strategic options to boost shareholder value, including a potential breakup of its business. The news sent its shares up 2% in premarket trading on Tuesday. The company is said to be considering splitting its drugstore chain from its insurance business, Aetna, and may house its pharmacy benefits manager unit, Caremark, in either company after the potential split.
The move comes after major investor Glenview Capital Management pushed for changes, citing concerns over the company’s operations. CVS has been struggling to meet its annual guidance, cutting its forecast for the third quarter in a row. The company will also lay off 2,900 employees, less than 1% of its workforce, to further reduce costs.
Meanwhile, Federal Reserve Chair Jerome Powell indicated that policymakers are not in a hurry to cut interest rates quickly, citing the need to monitor employment reports and inflation readings ahead of the November meeting.
In other news, a shareholder lawsuit against Tesla was dismissed without prejudice, while Amazon won partial dismissal of an antitrust lawsuit by the Federal Trade Commission. Dockworkers on the East and Gulf coasts have gone on strike, blocking shipments at all ports from Maine to Texas, which could cost the US economy $3.78 billion if it lasts a week.
Markets were mixed in Asia, with Japan up 1.9%, while Europe saw modest gains. US futures were flat, with the Dow down 0.2% and the S&P up 0.1%. Crude oil fell 0.5% to $67.83, while gold rose 0.5% to $2,671.70. Bitcoin gained 0.7% to $63,943. The ten-year Treasury yield fell 4 basis points to 3.75%.
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