The Short discusses a 15% drop in Hims & Hers stock following an FDA announcement ending the shortage of Eli Lilly's weight loss drug, Zepibound (Trizepatide). Despite Hims & Hers not selling Trizepatide but offering semaglutide, which remains in shortage, investor confusion and overreaction led to the stock decline. The video suggests that this reaction doesn't reflect the company's fundamentals and some see it as a buying opportunity.
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00:00Did a drug shortage just crash a stock by 15%? Even though the company doesn't even sell it?
00:05Well, let me explain. The FDA just announced that the shortage of Eli Lilly's weight loss drug,
00:11Zepibound, also known as trizepatide, is officially over. Great news, right?
00:16Well, here's where it gets confusing. Shares of hims and her dropped by 15% after this announcement,
00:22even though the company doesn't sell trizepatide. Instead, they offer compounded
00:26semaglutide, the active ingredient in Wigovi and Ozempic, which is still in shortage.
00:31So why the sell-off? Well, some investors seem to be confused by the FDA's announcement,
00:37thinking it affected semaglutide as well. Others may be overreacted to potential regulatory
00:42scrutiny of compounding pharmacies that produce alternatives to these in-demand drugs.
00:48But here's the kicker. Many investors now see this drop as an opportunity,
00:52arguing that hims and her's business remains strong and this sell-off doesn't
00:56really affect the company's actual fundamentals or future prospects.
01:00It's a perfect example of how market reactions can sometimes miss the mark, and
01:04why staying informed is key. So what do you think? Was this
01:08sell-off justified or just an overreaction? Let me know in the comments below.