Twinkie takeover
Hostess joins the Smucker's jam
Good morning, sweet-toothed supporters. This is your Stock Market Rundown for September 13th, 2023. Thanks for joining me. Let’s get into it:
TODAY’S TOP STORY: SWEET DEAL 🍩
Big news in Big Snack: Hostess, maker of Twinkies, has been acquired by J.M. Smucker. It’s the victory lap in a saga that saw Hostess go from an ugly bankruptcy, to biting into billions.
You’d think the appetites of the American Eater would guarantee success in selling sweet, gooey snack cakes, but not so: Hostess has gone through Chapter 11 bankruptcy twice in the past two decades.
The most recent flirtation with failure came in 2012. Private equity owners loaded the business up with so much debt, they couldn’t sell enough Iced Vanilla Zingers and Suzy Q’s to service it. Employees were laid off, and consumers looked on in horror as Twinkies disappeared from grocery shelves.
Luckily, new owners acquired the Hostess brand in 2013 and turned things around. To save on crippling labor costs, they brought in robot workers to automate packing lines. Twinkies were saved, and revenue grew so much the business went public in 2016 under the stock symbol TWNK.
The snack aisle at your local grocery store may offer chickpea chips and sugar-free brownies, but the data shows that these better-for-you treats aren’t what most consumers reach for. In fact, in the past few years, indulgent snacks have grown 20% faster than healthy snacks. Forget the fruit salad, hand over the Ho Hos.
To get a piece of this blood-sugar-spiking action, Smucker is ponying up $5.6 billion for the Hostess business. A modest price to pay for Ding Dongs, Sno Balls, and various other extruded concoctions your great-grandmother wouldn’t recognize as food.
SO WHAT ELSE IS GOING ON?
The pumpkin spice craze has peaked: Wendy’s just introduced a Pumpkin Spice Frosty. A large has more calories than a stack of pancakes, so it’s ideal if you’re running a marathon right after consuming it.
A Swedish truck company just unveiled a hybrid semi covered in solar panels. Alas, Sweden isn’t really sunny enough for those panels to do much more than power the automatic windows, but points for trying.
Rich? You’ve got a target on your back. The IRS is cracking down on millionaire tax delinquents, and hiring hundreds of additional special agents armed with Glocks and the US Tax Code.
Elon Musk says Twitter has lost 90% of its value since he acquired it, due to advertisers fleeing and Musk picking weird fights with everybody. Elon, bro, haven’t you ever heard of buying low and selling high?
That’s it for today, friends; see you at the usual time tomorrow. Yours in capitalism, The Axe