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As demand for plant-based meat cools, advocates for cultivated meat, which is grown directly from animal cells, think they can target a wider consumer base.
Last fall, cultivated-meat company Upside Foods became the first in the U.S. to be viewed as safe for human consumption by the Food and Drug Administration.
With regulatory approval in its sights, Upside Foods sees 2023 as a watershed moment for the cultivated-meat industry.

A look at Upside’s prepared chicken product.
Upside Foods

When Amy Chen took her first bite of chicken meat grown directly from cells in a lab, her initial reaction was a cliché one-liner: It tasted like chicken. 
That bite was years in the making.

Chen is the operating chief at Upside Foods, a Berkeley, California-based food-technology company that’s been working to bring what’s known as cultivated meat to the American mainstream since 2015.
Chen’s unusual dining experience, which she calls “the most remarkable and most unremarkable” of her life, could become a lot more common in the years to come. In November, the Food and Drug Administration cleared Upside’s cell-cultivated chicken as safe for human consumption, marking the first time the agency has given that designation to a lab-grown meat product. 
The FDA green light brings Upside to a major inflection point, Chen said. Since 2015, the company has largely been a scientific endeavor. Now, the next chapter of Upside’s story is whether that credible science can turn into a functional business model. 
Upside Foods’ pivotal moment also comes at a key moment in the alternative meat industry. Demand for plant-based meats, once the darling of meat alternatives, has largely cooled as an influx of products crowded the market. Yet the environmental concerns that drove their rise to popularity persist: Global emissions from food production are expected to rise 60% by 2050, with livestock a major driver of that increase.
Big name backers, such as Bill Gates and Richard Branson, plus industry leaders like Chen, hope that cultivated meat, which doesn’t require the land or livestock-related emissions that comes with traditional meat production, could be the solution.

But getting consumers on board — and the products on grocery shelves — promises to be a steep climb.

Will the public dig in?

The cultivated-meat industry could have a wider consumer base than previously introduced alternative meat products, because unlike plant-based meats, it’s “real” meat — minus the slaughtered animals.
If the taste is up to snuff, as Chen felt it was, Upside’s products could potentially appeal to both conflicted carnivores and vegetarians who avoid meat for environmental or animal-welfare concerns. The challenge for companies like Upside is getting the public on board with eating meat made in a lab from animal cells.
While some vegetarians might be willing to partake, Chen said Upside is “laser-focused” on targeting “improvers,” or people who recognize the current food system is unsustainable and want to make it better — but still eat meat, maybe occasionally or maybe daily. “When you think about that consumer [group], it’s actually a pretty decent part of the population,” she said. 
Chen jokes with her team that their current task is merely getting “people past thinking that this is a science project.”
To the untrained ear, it certainly sounds like a science project: To make its chicken product, Upside first takes a small amount of cells from a fertilized chicken egg. Then, its scientists select the best cells to develop a cell line. Those cells are placed in a cultivator, where they’re fed nutrients like water and amino acids in order to multiply. After a few weeks, the meat is removed from the cultivator and separated from the cell feed so it can be shaped into a chicken fillet. 
That’s a far cry from the comparatively simple process for making plant-based meats. And, accordingly, some traditional meat companies have expressed interest in the burgeoning cultivated-meat industry, which one day could become a competitor.
Tyson Ventures, the venture capital branch of Tyson Foods, for example, was an early investor in Upside.
“That sort of perspective from a meat company says a lot about how they view the potential consumer base,” said Elliot Swartz, the lead cultivated-meat scientist at the Good Food Institute, a nonprofit think tank focused on improving the global food system. The organization, which advocates for alternative protein innovation, has been funded by Silicon Valley startup accelerator Y Combinator, according to Crunchbase. Y Combinator has also funded cultivated-meat company Micro Meat.

Chef Dominique Crenn at work in her kitchen
Upside Foods

Rather than thinking of other alternative meat companies as Upside’s rivals, Chen regards the company’s main competition as the status quo, since meat eaters can already get what they’re looking for at a low price.
An Upside Foods representative said it expects to enter the market at a “price premium” but the company’s “aspiration” is to achieve price parity with traditional meat in the next five to 15 years.
There are plenty of other companies in the cultivated-meat space, which could also sway prices. Swartz said there’s about 150 companies worldwide developing cultivated meat or helping build the industry’s future supply chain. Other companies, like Finless Foods, BlueNalu and Fork & Good, are also developing various cell-cultured meat products in the U.S.
A Fork & Good representative said the company expects to “sell at the cost of meat of the same value,” while a BlueNalu representative said it aims to “offer products at or close to price parity,” but says it’s “not in a position to provide details around cost” since it has yet to bring a product to market.
But despite these signs of growth, customers may not be able to try cultivated meat for some time. Upside plans to debut its chicken products in restaurants, starting with Michelin-starred Atelier Crenn, helmed by chef Dominique Crenn, in San Francisco, because of a marked tendency to try new dining experiences outside of the home.
That debut can’t occur, however, until Upside gets the full regulatory go-ahead. Chen added that the company will keep its meat exclusively in restaurants “for some time” before expanding to consumer products. 
That’s been a common go-to-market strategy for similar companies, Swartz pointed out, adding that Impossible Foods took that approach in 2016 when it launched its products at David Chang’s Momofuku Nishi in New York City.  
“I think it will be a near-ubiquitous strategy in this industry,” he said, especially since most cultivated-meat facilities lack the production volume for much more at the moment.
“You cannot, with the existing infrastructure, get these products onto grocery store shelves,” Swartz added. 

Beefing up

The entire cultivated-meat industry faces a problem of scale. While hailed as a climate-friendly meat alternative, the products can only realize that truth when they can be shipped in cost-efficient volume in order to compete with the traditional grocery fare on store shelves.
In fact, cultivated-meat companies may never compete with traditional meat in price, Swartz said, but in order to demonstrate true proof of concept, they’ll have to at least demonstrate that they can make products in accordance with their estimated pricing models. 
“What drives consumers really comes down to price, taste and convenience,” he said. “Convenience implies operating at massive scale, and one of the limiting factors for the industry is going to be building new infrastructure.” 
There isn’t a supply chain in place for cultivated meat, and the blueprint is being created in real time by companies like Upside Foods.
In 2021, Upside opened its first production facility in Emeryville, California, a 53,000-square-foot space powered entirely by renewable energy. At that facility, Upside tests new technologies and processes to determine what changes need to happen in order to scale up, Chen said.
The plan is to transfer those models into Upside’s eventual larger facilities, she said, adding that its first commercial plants will likely open later this year. 

Upside’s 53,000 square foot Emeryville, CA facility is powered by renewable energy.
Upside Foods

“When we talk about scale, especially with respect to the food system, it’s still really, really small scale,” Swartz said of existing cultivated-meat facilities, including Upside’s. As the industry grows, he said he expects it to take a similar path to another once-fringe, now-ubiquitous, innovation: electric vehicles. 
When electric vehicle companies started out, the cost of batteries was tremendously high, so much so that batteries were often the most expensive part of producing a given vehicle. Electric vehicle companies worked around that by introducing hybrid options “where the cost is diluted by the existing product that’s on the market,” Swartz explained.
Some cultivated-meat companies are taking a similar approach, mixing cultured animal cells with plant-based proteins to keep costs down and increase the range of available products.
After Upside launches its first consumer product, the cultivated chicken fillet, its next debut will be ground products made up of both animal cells and other ingredients, including vegetables and plant-based proteins.
Industry prices could be influenced by other companies taking the same hybrid approach, but some cultivated-meat companies, like BlueNalu, have expressly said they have no plans to bring plant-based proteins into their mix.
Another crucial boon for the electric vehicle industry was governmental funding, in which agencies invested in research and encouraged incentives for building new electric vehicle infrastructure. The cultivated-meat industry will need a similar boost if it’s ever going to become a grocery store staple, Swartz said.
Upside is part of a multi-member coalition, the Association for Meat, Poultry and Seafood Innovation, that lobbies on behalf of cell-based meat interests, with a particular focus on working with regulators to create a transparent pathway to market.
Within the past decade, investors already poured billions of dollars into cultivated-meat companies, but that’s just “a drop in the bucket compared to what’s going to advance this still nascent technology,” Swartz said. To get cultivated meat on grocery store shelves at a reasonable price point, it’s going to take “many, many, many more billions of dollars,” he added. 

Red meat for regulators

One other factor is keeping cultivated meat outside of supermarkets: government clearance. While the FDA milestone last November was a watershed moment in the cultivated-meat industry, Upside still has a number of regulatory hurdles to get over before its products enter the U.S. market.
The FDA’s clearance was a voluntary premarket consultation, which means the agency has no further questions about the safety of Upside’s products. Now, Upside must meet the same stringent FDA requirements as any other food product, including registering its facilities, an agency official told CNBC via email. 
In March 2019, the FDA and the U.S. Department of Agriculture agreed to a joint regulatory framework for handling foods made with animal-cell technology. When regulating companies like Upside Foods, the FDA will oversee cell collection, cell banks and cell growth and differentiation. In the cell-harvest stage, oversight will shift to the USDA-FSIS, which will oversee post-harvest processing and product labeling. 
The joint regulatory structure means Upside’s manufacturing establishments need a grant of inspection from the USDA-FSIS in addition to meeting FDA requirements. Additionally, its food products will need a mark of inspection from USDA-FSIS before they can be sold in the U.S. FSIS stands for the Food Safety and Inspection Service. 
A USDA representative told CNBC that Upside’s grant of inspection application is currently under review and “proceeding normally.”

Upside Foods’ office space
Upside Foods

The grant process requires discussions between the company and the USDA to ensure all meat and poultry products are safely produced and properly labeled, according to the representative. That makes it unclear when products could be OK’d for sale.
Chen says Upside is “optimistic” it’ll happen this year, and the company is conducting its internal planning with that timeframe in mind, while ultimately deferring to the agencies. “That process is thorough and ongoing,” she added. “We’ve had really productive conversations going on with the USDA.”
While curious consumers who’ve known about cultivated meat for awhile might be impatient for their first taste, Swartz noted that “for a technology that incorporates different aspects of biotech, it’s a very fast timeline to get government approval.” 
Though Upside Food was the first to get the FDA’s premarket seal of approval, a second entity, GOOD Meat, Inc., a cultivated-meat company that received regulatory approval from the Singapore Food Agency in 2020, made the grade in March.
These moves have paved the way for others. While the FDA doesn’t typically discuss the status of ongoing consultations, the agency says it’s already in talks with other companies working to make food from animal cells.
Chen, for her part, is excited for what’s to come. “This is the moment where cultivated meat comes to the world, and comes into its own,” she said.  More

Federal prosecutors in New York announced criminal charges against an 18-year-old Wisconsin man for a scheme to hack user accounts of the sports betting site DraftKings.
Joseph Garrison is accused of working with others to steal about $600,000 from approximately 1,600 victim accounts during the November 2022 attack.

In this photo illustration, the American daily fantasy sports contest and sports betting company DraftKings logo is displayed on a smartphone screen.
Budrul Chukrut | Lightrocket | Getty Images

Federal prosecutors on Thursday announced criminal charges against an 18-year-old Wisconsin man for a scheme to hack and sell access to user accounts of the sports betting site DraftKings.
The man, Joseph Garrison, is accused of working with others to steal about $600,000 from approximately 1,600 victim accounts during the November 2022 attack, according to the U.S. Attorney’s Office in Manhattan.

DraftKings is not named in the criminal complaint against Garrison. But a person close to the company said it was a target of the so-called credential stuffing attack. DraftKings later confirmed it.
In a statement to CNBC, DraftKings said: “The safety and security of our customers’ personal and payment information is of paramount importance to DraftKings. We worked with law enforcement in catching the alleged bad actor(s), and we want to thank the Department of Justice, including the FBI and U.S. Attorney, Southern District of New York, for their prompt and effective action.”
The company said it restored funds for the “limited number of users” who were impacted by the breach.
Law enforcement authorities searched Garrison’s home in Wisconsin on Feb. 23, and recovered his computer and cellphone, according to the complaint.
On those devices, investigators found credential stuffing programs, instruction photos on how to use stolen user credentials to steal money from victim accounts, and messages between Garrison and co-conspirators, the complaint said.

The messages included ones where Garrison wrote, “fraud is fun . . . im addicted to see money in my account . . . im like obsessed with bypassing s—,” according to a court filing.
The images cited in the FBI affidavit were hosted on Imgur, a popular file-sharing website.
CNBC also found the same images on a website that purportedly sells compromised accounts on DraftKings and FanDuel, among others.
ESPN previously reported that a cyberattack in November affected users of DraftKings and rival site FanDuel. FanDuel told CNBC it wasn’t materially impacted by the attack: “Our security did its job.”
Garrison is charged with conspiracy to commit computer intrusions, unauthorized access to a protected computer to further intended fraud, unauthorized access to a protected computer, wire fraud conspiracy, wire fraud and aggravated identity theft.
He faces a maximum possible prison sentence of 20 years if convicted, but would likely get significantly less time under federal guidelines.
Chris Cylke, senior vice president for government relations at The American Gaming Association, an industry group told CNBC: “The legal gaming industry is working hard to provide consumers with safe, regulated access to betting.”
“Today’s news reinforces the importance for law enforcement at all levels to hold fraudsters and other criminals accountable,” Cylke said.
–CNBC’s Rohan Goswami contributed to this report. More

Bowlero’s president and outgoing finance chief, Brett Parker, publicly addressed a sprawling federal investigation into the company’s employment practices during an earnings call with investors.
Parker called the claims baseless and shrugged off any suggestion it could have a material impact on the business.
The comments mark the first time a Bowlero executive has publicly addressed the probe, which has been ongoing since 2016. 

A Bowlero location at Chelsea Piers in New York City. 

A Bowlero executive publicly addressed the sprawling federal discrimination probe the company is facing for the first time Wednesday after it reported another quarter of what it called record-breaking growth. 
Brett Parker, the company’s outgoing chief financial officer and longtime No. 2 to CEO Thomas Shannon, was asked about the investigation during an earnings call. The question came about a week after CNBC revealed authorities want to settle the investigation for $60 million. 

“There’s been quite a bit of noise related to the EEOC review that’s been pending here. It seemed to grab quite a bit of media attention in the last week. Want to see if there is anything that you wanted to comment on that,” Jeremy Scott Hamblin, an analyst with Craig-Hallum Capital Group, asked Parker. 
Parker responded by saying the claims included in CNBC’s reporting are “entirely false,” and “we deny them in the strongest terms.”
“We have nothing to hide. We have fully cooperated and provided information to document — and documents to the EEOC throughout this whole process,” said Parker. 
“Our own thorough investigation into the claims also has not substantiated any evidence of wrongdoing or any violation of our policies prohibiting any form of employment discrimination,” he said.
Parker went on to say the company “does not tolerate discriminatory or demeaning context.” He insisted “these are the facts,” which is why the company has fought so hard to have the claims thrown out.

“Whatever the outcome is, it will not materially impact our business or distract us from executing against our strategic priorities. Our latest earnings results that we’re talking about now reflect our unwavering focus and commitment to excellence,” he said. 
“At the end of the day, we stand by our positive workplace culture, we stand by our visionary leader, and we stand by our track record of cultivating exceptional talent. And beyond that, there’s not much we can say.”
Bowlero’s fiscal third-quarter revenue in the three months that ended April 2 was $316 million, up 22% year over year, but its net loss widened to $32 million, a 78% jump compared to the year-earlier period. The loss was driven by an $87 million expense associated with a revaluation of earnout shares.
The third quarter is historically the company’s strongest, and executives noted during an earnings call the latest quarter was its strongest ever. However, Bowlero’s stock plummeted when the markets opened Thursday morning and it closed nearly 17% lower.
During its earnings call, the company said it had benefited from post-pandemic demand in restaurants and entertainment and its strong year-over-year growth is expected to normalize as consumers cut spending.
Further, in its quarterly securities filing, Bowlero noted its disclosure controls and procedures were not effective because of a material weakness related to its accounting processes.
The disclosure prompted three law firms to open investigations into Bowlero for potential securities violations, press releases sent by the firms state. Stockholders were encouraged to contact the firms. Bowlero didn’t return a request for comment on the matter.

Bowlero faces dozens of claims

Last week, Bowlero’s stock dropped as much as 9% in intraday trading after CNBC published an investigation that revealed new details about a sprawling investigation the U.S. Equal Employment Opportunity Commission has been conducting into the company’s employment practices. The stock closed about 4% lower that day.
Parker’s comments mark the first time a Bowlero executive has publicly addressed the EEOC’s probe, which has been ongoing since 2016.
When CNBC reached out to Bowlero prior to publishing a report about the probe, the company refused to make its executives available for an interview. It only communicated through its attorneys and an outside press representative. At times, discussions around reporting the confidential settlement negotiations became antagonistic when the outside press representative intimated a CNBC reporter could be arrested for publishing the information, underscoring the seriousness of the claims.
The case involves at least 73 former employees who claim they were fired based on their age, or out of retaliation, according to securities filings.
The EEOC has found reasonable cause in 55 of those cases, which sparked a larger pattern or practice probe — a type of investigation the agency initiates in cases where systemic issues of discrimination could be occurring. 
The agency has found reasonable cause that Bowlero has engaged in a pattern or practice of discrimination since at least 2013, which coincides with its expansion from a small chain to a national powerhouse with 329 locations. 
Bowlero’s CEO is accused of directing staff to fire aging employees and replace them with candidates perceived as young and hip, former employees told the EEOC. 
Among staff, the top executive was also known to make condescending jokes about women, offhand remarks that were “racially motivated” and negative comments about LGBTQ people, the affidavit says. Some female employees didn’t openly disclose their marital status or their pregnancies out of fear of losing their jobs, a former HR employee told the EEOC.
Bowlero’s lawyers previously called every allegation against Shannon “meritless.”
While it is not uncommon for a company, especially one of Bowlero’s size, to face an EEOC complaint from a former employee, it is rare for the EEOC to determine reasonable cause. 
In all of fiscal 2021, the most recent data available, the agency found reasonable cause in just 2.8% of the thousands of age-discrimination charges it received. 
The EEOC recently attempted to settle the charges for $60 million, but negotiations fell apart when Bowlero countered with $500,000, according to attorney Daniel Dowe, who represents more than 70 former employees with claims against the company. 
The case is now expected to go to court, where Bowlero could face even steeper fines, experts said previously.  More

Disney will no longer be moving forward with the construction of its Lake Nona, Florida, employee campus.
The company will also no longer be requiring California-based employees to relocate.
The announcement comes amid a bitter feud between the company and Florida Gov. Ron DeSantis centered in part around the company’s special district and development plans.

Cinderella Castle in Walt Disney World.
Roberto Machado Noa | Lightrocket | Getty Images

Disney has abandoned plans to open up a new employee campus in Lake Nona, Florida, amid rising tensions with the state’s governor.
Citing “changing business conditions” and the return of CEO Bob Iger, Josh D’Amaro, chairman of Disney’s parks, experiences and products division, penned a memo to employees Thursday, announcing that the company will not move forward with construction of the campus and will no longer be asking more than 2,000 California-based employees to relocate to Florida.

“This was not an easy decision to make, but I believe it is the right one,” D’Amaro told employees.

Many Disney employees balked at the company’s relocation plans when they were first announced in July 2021 by former CEO Bob Chapek. While some left the company, or transitioned to other posts within Disney that would not require a move to Florida, others held out hope that the plan would fizzle out after a postponement. The campus was originally slated to open in 2022-2023, but was later delayed to 2026.
Disney is headquartered in Burbank, California, but operates a number of satellite offices across the country and the world.
D’Amaro said employees who have already moved to Florida may be able to relocate back to California.
“It is clear to me that the power of this brand comes from our incredible people, and we are committed to handling this change with care and compassion,” he said.

Disney’s announcement comes amid a bitter feud between the company and Florida Gov. Ron DeSantis. The company filed a lawsuit accusing DeSantis and the new board members of its special district of carrying out a campaign of political retribution against the entertainment giant.
DeSantis targeted Disney’s special district, formerly called the Reedy Creek Improvement District, after the company publicly criticized a controversial Florida bill — dubbed “Don’t Say Gay” by critics — that limits discussion of sexual orientation and gender identity in classrooms.
The special district has allowed the entertainment giant to effectively self-govern its Orlando parks’ operations for decades. The district was ultimately left intact, but its five-member board was replaced with DeSantis picks and renamed the Central Florida Tourism Oversight District.
Disney filed its suit in late April after the new board voted to undo development contracts that the company said it struck to secure its investments. The company has since updated that lawsuit to include newly passed legislation targeting its monorail system as further evidence of retaliation by the governor.
Iger has publicly lambasted DeSantis and the Florida government, noting that Disney has created thousands of indirect jobs, brings around 50 million visitors to Florida every year and is the state’s largest taxpayer.
In a statement later Thursday, representatives for DeSantis called the decision to nix the Lake Nona campus “unsurprising.”
“Disney announced the possibility of a Lake Nona campus nearly two years ago. Nothing ever came of the project, and the state was unsure whether it would come to fruition,” DeSantis’ office said in the statement.
D’Amaro reiterated in his memo that the company still plans to invest $17 billion in Florida over the next 10 years, including the addition of around 13,000 jobs. The company currently employs more than 75,000 people in the state.
Disney declined to provide specific updates on that investment, but has previously announced plans to update park attractions, expand existing parks and add more cruise ships to its fleet in Florida.
“I remain optimistic about the direction of our Walt Disney World business,” D’Amaro told employees. More

Still flush with cash from Covid, and eager to own one-of-a-kind rides that stand out from the pack, today’s wealthy car buyers are willing to pay steep prices for special details.
CEO Adrian Hallmark said the average price of a Bentley sold has jumped 40% over the past four years.
Bentley is not seeing any signs of a demand slowdown from rising rates, falling stocks and recession fears.

Bentley CEO Adrian Hallmark.
Scott Mlyn | CNBC

After a record-breaking year in 2022, Bentley Motors reported surging profits in the first quarter due in large part to car customization, CEO Adrian Hallmark said.
Bentley reported its best-ever first quarter, with operating profits up 27% to 216 million euros, or about $232 million. Even more impressive, especially at a time when many car companies are seeing profit margins under pressure, Bentley reported its return on sales increased in the first quarter to 24.4% from 20.9% during the same period in 2022.

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The reason: Wealthy buyers are spending more to personalize their cars with special paint colors, leather, stitching and details.
“Customers are choosing one of our 62 paint colors, the 43 leathers we offer and lots of options,” Hallmark told CNBC. “So, it’s a total shift in the configuration of the vehicle. And they’re buying the top models, like the Speed version of the Continental GT, rather than base edition.”
Hallmark said the average price of a Bentley sold has jumped 40% over the past four years, but only 9% of that increase is due to model price increases. “The rest is content,” he said, meaning upgrades, options and personalization.
The rise of customization is driving record profits across the supercar segment, from Rolls-Royce and Ferrari to Lamborghini, Aston Martin and McLaren. Still flush with cash from the Covid-19 pandemic and eager to own one-of-a-kind rides that stand out from the pack, today’s wealthy car buyers are willing to pay steep prices for special details.
In its first-quarter earnings call, Ferrari said its adjusted EBITDA got a boost of 85 million euros, or about $91.6 million, from “higher personalizations whose contribution exceeded our projections.”

Rolls-Royce’s Bespoke department has become famous for meeting unusual client demands, from matching the paint color of a piece of ancient Japanese ceramic to copying an Hermès design scheme on a client’s private jet.
Bentley’s Mulliner Edition department at the company’s Crewe factory is turning out record numbers of one-of-a-kind Bentleys with special paint colors, metal finishes and embroidery. Some clients want their names or family crests embroidered on the seats, while others want special interior lighting or carbon-fiber details.
One of the company’s most-popular options for its Continental model is a rotating display, where a section of the dashboard flips from a plain carbon face to an infotainment touchscreen. Despite the steep cost, at over $6,000, the upgrade has been purchased by nearly three-quarters of buyers, according to the company.
“The whole world of luxury is changing,” Hallmark said. “It’s not just cars, it’s fashion, everything. If customers are going to spend that kind of money on something, they’d rather pay a little more for the upgrade or option to have something truly special.”
Beyond upgrades and personalization, Hallmark said Bentley is not seeing any signs of a demand slowdown from rising rates, falling stocks and recession fears.
“The order intake in the U.S., like most of our markets at the moment, is really strong,” he said. While prices for used or pre-owned Bentleys are coming down slightly, Hallmark said the adjustment is healthy.
“We can see on the secondary market that residual values, instead of being crazy and above retail like they were, are now normalizing. But the demand is really strong still.” More

Netflix’s stock rose Thursday following its pitch to advertisers this week.
The streaming service said it had five million monthly active users for its cheaper, ad-supported option and 25% of its new subscribers were signing up for the newest tier.
Netflix introduced a cheaper, ad-supported option late last year after subscriber growth stagnated.

Sopa Images | Lightrocket | Getty Images

Netflix saw its stock rise more than 9% Thursday soon after unveiling details about its new ad-supported tier that suggested the business model is starting to pay off.
The streaming service this week said it had five million monthly active users for its cheaper, ad-supported option and 25% of its new subscribers were signing up for the tier in areas where it’s available.

The update came at Netflix’s inaugural pitch to advertisers Wednesday, the first time Netflix took part in the industry’s so-called Upfront presentations. This year, top media companies including Comcast’s NBCUniversal and Warner Bros. Discovery highlighted ad-supported streaming options at their presentations.

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Netflix stock rallied on Thursday soon after the company offered new details about its ad-support streaming tier.

Netflix launched its ad-based option late 2022, following quarters of stagnating subscriber growth that sent its stock tumbling.
The company posted mixed financial results in its most recent quarter, but said it added 1.75 million subscribers. Netflix is also preparing for the broader rollout of its password-sharing crackdown, another move to boost its revenue.
Media companies, once focused on subscriber additions for their fledgling streaming services, have now pivoted their attention toward making the businesses profitable. To do so, some have been cutting costs on content spending and leaning on advertising models.
Last week, when Disney reported earnings, CEO Bob Iger noted the company viewed the ad-supported option of its Disney+ streaming service as another way to help the streaming business reach profitability. Disney+ lost four million subscribers during the quarter.

Netflix’s ad tier, which costs $6.99 a month and features commercials of 15 or 30 seconds in length before and during content, marks a reversal for the company’s management, which had long said it wouldn’t put ads on the platform.
Netflix launched the ad option in partnership with Microsoft. Its content will be rated by Nielsen later this year to help advertisers better understand its reach.
Soon after the launch, Netflix founder and former CEO Reed Hastings admitted he was slow to come around to advertising on the platform. When Netflix launched the ad tier in November, it was $1 cheaper than Disney+ and Hulu’s ad-supported options.
Netflix Co-CEO Ted Sarandos has said the company is likely to offer multiple subscription plans with ads in the future, highlighting the potential to add more subscribers.
— CNBC’s Alex Sherman contributed to this report. More

Peloton shares climbed Thursday after the company said it would release a rear safety guard for its recalled Tread+ treadmill.
The Tread+ treadmill has been at the heart of safety concerns surrounding Peloton in recent years, after a young child died under one in 2021.
The new safety guard will be available later this year.

Maggie Lu uses a Peloton Tread+ treadmill during CES 2018 at the Las Vegas Convention Center, January 11, 2018.
Ethan Miller | Getty Images

Peloton said Thursday it would release a rear safety guard for its Tread+ treadmill, working with the U.S. Consumer Product Safety Commission.
The stock closed nearly 3% higher on Thursday.

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The Tread+ treadmill has been at the heart of safety concerns surrounding Peloton in recent years. Sales for the treadmill have been halted since a young child died under a Tread+ treadmill in 2021.
Since the recall, there have been 279 more reported incidents and 61 reports of injuries, Peloton and CPSC said in a joint statement.
The safety guard will be offered free of charge to people who own a Tread+ treadmill, the company said in a release.
Customers can register in advance to receive the guard. It is still being manufactured and is expected to be available in the fall.
Following the 2021 recall, Peloton told Tread+ treadmill owners to stop using the product.

The new guard has a breakaway design that moves away from the treadmill when it touches an object, which turns off power and decelerates the belt. It aims to eliminate the potential for entrapment near the treadmill’s rear, which is primarily what caused incidents in the past.
“As a brand dedicated to empowering Members on their fitness journey, Peloton remains committed to ensuring they have access to our world-class fitness experiences in the safest way possible,” the company said.
In addition to the Tread+ treadmill’s woes, other safety concerns have plagued Peloton in recent years.
Amid the mounting concerns, the company changed its stance on recalls in recent weeks.
Last week, when the CPSC recalled 2.2 million Peloton bikes over safety concerns, Peloton cooperated, saying it was “important to proactively engage the CPSC to address this issue and to work swiftly and cooperatively to identify a remedy.”
A part defect on model number PL01 bikes led to 12 reported injuries, including one wrist fracture, according to an internal Peloton memo.
Previously, the company was slow to cooperate with officials and expressed disagreement over potential flaws. Peloton said it took action, despite the relatively small number of affected bikes, because it was a “member-first company,” according to the internal memo.
Earlier this month, the company posted a wider-than-expected loss for its fiscal third quarter while forecasting its first-ever decline in subscribers. More

Horizon Therapeutics expects its $27.8 billion sale to Amgen to close as early as the end of the third quarter of this year, earlier than previously planned, if the Federal Trade Commission’s attempt to block the deal fails.
The FTC filed a lawsuit in Illinois federal court seeking to halt the acquisition, arguing it would “stifle competition” in the pharmaceutical industry.
If a federal court denies the FTC’s request by Sept. 15, Horizon expects the deal to close by “end of Q3 or early in Q4 of 2023.”

Robert Galbraith | Reuters

Horizon Therapeutics expects its $27.8 billion sale to Amgen to close as early as the end of the third quarter, earlier than previously planned — if the Federal Trade Commission’s attempt to block the deal fails — according to a document filed Thursday with the Securities and Exchange Commission. 
The FTC on Tuesday filed a lawsuit in Illinois federal court seeking to halt the acquisition, arguing it would “stifle competition” in the pharmaceutical industry.

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Horizon, which is based in Ireland, said in the new SEC filing that the deal could close by the “end of Q3 or early in Q4 of 2023” if a federal court denies the FTC’s request by Sept. 15. The companies agreed not to close the acquisition until that date or the second business day after the court rules on the lawsuit.
Horizon’s estimate is earlier than when the companies and Wall Street analysts were initially expecting the deal to close after the FTC sued. The parties previously said it could close around mid-December.
Horizon’s share price was about 1% higher in afternoon trading Thursday. California-based Amgen’s stock price dipped 1% lower.
If completed, the deal would give Amgen access to Horizon’s blockbuster thyroid eye disease drug, Tepezza, and its gout medicine, Krystexxa.
Those treatments could help Amgen offset possible revenue declines driven by several patent expirations for key treatments over the next decade. 

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They’re also at the center of the FTC’s lawsuit seeking to block the deal. The agency said the deal would allow Amgen to “entrench the monopoly positions” of those two fast-growing drugs from Horizon.
Amgen would be able to offer rebates on its existing medicines to pressure insurers and pharmacy benefit managers into favoring the two Horizon products, a strategy known as “cross-market bundling.”
On Tuesday, Amgen said in a statement it has “overwhelmingly demonstrated” that the merger poses no competitive issues.
Horizon, in a separate statement, said it “does not and has no plans” to engage in cross-market bundling. More