Hedge funds that borrowed and sold Krispy Kreme stock to bet against it had to furiously buy the shares back. Analysts and investors initially predicted weight-loss drugs would weigh on companies such as Zimmer, as healthier consumers put less stress on hip and knee joints. Gladstone, which oversees more than $2 billion in assets, remains firm that the effect of the weight-loss drugs on consumers—and on share prices—will be profound. Krispy Kreme, meanwhile, was confronting higher costs and a substantial debt load. The firm recently added a small short position against Dutch healthcare-equipment maker Royal Philips, wagering that weight-loss drugs will help reduce the severity of sleep apnea.

Source: Wall Street Journal May 09, 2024 15:41 UTC