Meta's Massive Ray-Ban Deal + Is Starbucks Leaving China? | The Rundown July 9, 2025

Public.com presents The Rundown, your daily market update in under 10 minutes. My name is Zaid Admani, and today is Wednesday, July 9th. In today's episode, we'll tell you why Meta is investing billions of dollars into a sunglasses company. We'll also discuss Starbucks' plans for their struggling China business. Then stick around to the end of the show to find out what SpaceX was recently valued at. We got a great show for you today. Today, let's... Go. Well, markets had a hard time finding any momentum on Tuesday as President Trump added more confusion to his tariff policy. Stocks basically went nowhere with the S&P 500 dipping slightly into the red, while the NASDAQ finished just barely in the green. Both of these indices moved less than 0.1%. Now, the confusion stems from comments that Trump made at the cabinet meeting yesterday, where he said that the August 1st tariff pause deadline. Would not be extended, which is contradicting to what he said on Monday when he said that the August 1st date was not 100% firm. So we're now back in tariff limbo again and investors have to try to figure out where to go from here and how seriously to take Trump's comments. Is he actually going to stay firm with the August 1st date or is he just going to extend it again like he did last time? So all that uncertainty might lead to some short term volatility. It also doesn't help that there's nothing else going on in the markets right now. You know, we don't have any major economic reports coming out this week and earnings season doesn't really kick off until next week. So this tariff drama and Trump's comments is really the only thing that investors have to focus on right now. But, you know, you can skip all the doom scrolling and leave that to us. We'll stay on top of all this stuff and how it's impacting the markets throughout the summer and keep you guys in the loop. I can't wait for earnings season to start next week. So we have more stuff to talk about. Let's run through some headlines, starting with Meta. Meta is investing $3.5 billion in the world's largest eyewear maker. EssilorLuxottica. This is the company behind Ray-Bans, Oakley's, and about another 150 other brands that dominate your local sunglasses hut. Now, this investment from Meta gives them a minority stake of just under 3%. But according to Bloomberg, CEO Mark Zuckerberg is considering building that up to up to 5% over time. And to me, this is just another sign that Zuck is going all in on AI, especially AI-powered wearables like sunglasses. Meta and Luxottica have been working together since 2021 when they launched the first version of the Ray-Ban smart glasses. Then they launched an updated version in 2023, which included an AI-powered assistant and better built-in cameras. And those have quietly been a hit product, selling over 2 million pairs since last year. In fact, I own a pair myself and use them almost daily. It's a great product. I gotta say. So now these two companies are expected to ramp up their annual production of smart glasses to 10 million units by 2026. They've also announced plans to roll out new versions of these smart glasses under luxury brands like Prada and Oakley. So I guess Zuck is hoping that every suburban mom and dad starts wearing these AI glasses on their faces soon. I mean, Zuck's dream has always been to have a hit mass market hardware product. He tried to do that with VR headsets, but that didn't really catch on. See, right now, Meta is reliant on Apple in Google to get its apps to users. Zuck doesn't want to be reliant on those two companies. So that's why he's pushing hard to get a hit hardware product out there. And for Luxottica, I mean, this could be a potential jackpot if smart glasses actually go mainstream. That's why their stock jumped 7% on the Paris Stock Exchange on this news. It's the biggest move from the company's stock in three months. And meanwhile, here in the US, Warby Parker's share jumped 4%, with investors betting that they might get in on the future of smart glasses as well. Now, to be fair, wearables are a tough business. I mean, just go ask Snapchat Spectacles, which was a hilarious flop. But those glasses were terrible, and the tech has improved a lot since those glasses came out. In fact, the market is now expected to grow to over $8 billion by the end of the decade, and Zuck is spending billions of dollars on R&D to make these products better. It's possible that Meta might finally have a hit hardware product that isn't just a VR headset collecting dust on someone's shelf. Let's shift gears and talk about Starbucks. The coffee giant is looking to sell their struggling Chinese business, and it's drawing interest from investors. According to Bloomberg, Starbucks was hoping to sell just a minority stake in their China business, but most of the bids so far has been for the controlling ownership. The proposals reportedly value the China business between $5 and $10 billion, with expectations leaning towards the higher end, according to CNBC. Now, China is Starbucks' second largest market. It used to be Starbucks' growth engine. But these days, the company is struggling against homegrown Chinese chains like Luckin' Coffee. I mean, Starbucks' Chinese business has barely grown over the past couple of years. The company's revenues in 2024 was around $3 billion, Which is the same that it was in 2022. In fact, Luckin Coffee took the top spot from Starbucks in 2023 as the largest coffee chain in China, thanks to their cheaper drinks and rapid expansion. And just to give you some context here, Luckin just posted 41% revenue growth last quarter, while Starbucks' China revenue only saw a 5% growth and their comparable store sales were flat. And that's why you can see why Starbucks is thinking about selling their China business entirely. We'll see what the company ends up doing. Maybe they stick around and try to turn things around in China. But if they were to sell their China business, they could then use that money and time to focus on the U.S. market, which, I mean, let's be honest, hasn't been doing so great either. Now, Starbucks stock is up around 5% this year, which is slightly outperforming the S&P, but their shares are down close to 20% from all-time highs from a few years ago. Let's talk about some stocks making moves today. Good day. Shares of Verona Pharma are ripping higher this morning, jumping more than 20% after Merck announced that it'll acquire the London-based lung therapy company for $10 billion. Now, this would be Merck's biggest acquisition since 2023, and the deal would expand the company's respiratory treatment portfolio, which currently features two other chronic lung disease treatments. The blockbuster medicine that Merck would be adding in this acquisition would be Verona's O2ver, which was recently approved as a treatment for what is commonly Now, investors aren't as excited about Merck. Their shares are basically flat this morning, but this looks to be more of a long-term play to beef up their pipeline. On a side note, these pharma acquisitions are always just wild to me. Now sticking with the medical theme, United Healthcare stock is down this morning as the DOJ ramps up its investigation into the company's Medicare billing practices. According to the Wall Street Journal, federal investigators are now questioning employees at United Healthcare about whether the company encouraged doctors to add certain high paying diagnosis to patient records, which is a move that would boost revenues from Medicare Advantage plans. But it's essentially like frauding the government. Now, this probe has been brewing for a while now, but now the Feds are getting more aggressive. So this cloud might hang over UnitedHealthcare's stock for a while. Shares of the health insurance giant are down nearly 40% this year. Let's wrap the show with a fun fact. SpaceX is planning to raise money and sell insider shares that would give the company a valuation of around $400 billion, making it one of the most valuable private companies in the US and rivaling TikTok's parent company, ByteDance, which also has a valuation of around $400 billion. SpaceX previously had a $350 billion valuation after selling shares at the end of 2024. And then just a year ago, SpaceX was valued at just $210 billion. So in the last 12 months, the company has nearly doubled its value. The $400 billion valuation for SpaceX makes them more valuable than OpenAI, which recently raised money at a $300 billion valuation. Now, I personally wish these giant private companies would go public sooner. So normal investors like me and you could take advantage of the upside. Now, we're starting to see a decent amount of companies IPO this year, but a lot of the big names like SpaceX are still choosing to stay private. I mean, with the way things are going right now, I wonder if we're gonna see a private company cross a $1 trillion valuation before they even IPO. That might happen with SpaceX or OpenAI. Well, all right, guys, that's the rundown for today. Hope you guys enjoyed today's episode. By the way, if you guys have any questions for us, write them in the comments on Spotify or YouTube. We'll try to answer some of the listener questions on a future episode. We've done that a few times in the past and people seem to like it, so we want to keep doing it. And while you're at it, don't forget to hit us with a five-star rating on Apple, Spotify, wherever you listen to your podcast. As a reminder, this video is now a full-on video podcast, so you can watch these episodes on Spotify or YouTube. Thank you guys so much for listening and watching. Shout out to Mike and Connor for all the help behind the scenes. And we'll see you guys back here tomorrow.