Hello, N2K’ers!

Occasionally, there’s a big story in the news that we don’t include in N2K, and readers email to politely ask why we’ve omitted it. We try to keep the focus on business, tech, and finance stories here, but please do email us if you’d like to chat. Thanks!

Now let’s talk about the news you Need2Know, eh?

—Matt Davis, Need2Know Chedditor

News You Need2Know

• Why are Marvel movies losing more money lately?

• Novo Nordisk slashes jobs amid Lilly pressure

• Pokémon cards outperform Wall Street

• Trump admin requests emergency ruling to remove Co …

• FTC inquiry probes AI chatbots acting as companion …

What’s the stock market up to, eh?

$SPX ( ▲ 0.85% ) $DJI ( ▲ 1.36% ) $NDX ( ▲ 0.72% )

Companies mentioned in today’s newsletter

$DIS ( ▲ 1.11% )  $WBD ( ▲ 28.95% )  $TGT ( ▲ 0.82% )  $WMT ( ▲ 2.23% )  $EBAY ( ▲ 1.28% )  

Why are Marvel movies losing more money lately?

Ever since Disney $DIS ( ▲ 1.11% ) paid $4 billion for the Marvel franchise in 2009, their movies have been making less and less money. What’s going on? It turns out the problem has been baked into Marvel’s writing culture from the start.

The old-fashioned “Marvel method” of writing comic books has the writer provide a summary of the story to the artist, who then draws the entire issue. When the art is complete, the writer goes in and adds the dialogue. Lately, Marvel Studios production has worked more and more in the same way. Production will start even if the script isn’t finalized, and the filmmakers, like the artists of Marvel comics, are expected to fill in the details while they’re shooting. 

As you can imagine, that process is financially risky. Every second on set for a blockbuster production costs millions of dollars, so waiting around as the directors, actors, or on-set writers try to figure out what should happen next causes budgets to balloon. 

As the budgets rise, the margins for profitability become slimmer and slimmer. “Captain America: Brave New World” cost $300 million including marketing to make and made $415 million worldwide; “Thunderbolts” cost $280 million including marketing to make and made $380 million worldwide. The two movies are being described as “flops” by industry commentators, and the trend seems to only be getting worse as cast members of “Avengers: Doomsday” report that they don’t know who they’re in scenes with because they were shot individually on green screens so that the directors can piece scenes together later. No wonder the upcoming crossover movie was delayed from May to December.

Director James Gunn watched this happen firsthand when he worked on the “Guardians of the Galaxy” trilogy for Marvel, so it’s no wonder when he launched DC Studios with Peter Safan he instated the rule that no project will start production until there is a finished script everyone is happy with. “Superman,” for example, made $614 million worldwide for DC Studios $WBD ( ▲ 28.95% ) against reported production and marketing budgets between $200 and $300 million. The simple lesson seems to be that you want to prioritize good writing before you begin production on a big-budget movie. Will Marvel’s owner, Disney, ever learn?

— Grant Keller

Song of the day: Sophie Ellis Bextor, “Stay on Me”

Taken from her new album, “Perimenopop,” Sophie Ellis Bextor’s new single combines orchestral lounge music sounds with 1980s-style pop beats. What’s not to like?

Novo Nordisk slashes jobs amid Lilly pressure

Novo Nordisk $NVO ( ▼ 0.13% ) , the Danish pharmaceutical giant behind the weight-loss sensation Wegovy, is laying off 9,000 employees — approximately 11.5% of its global workforce — amid mounting competition in the weight-loss drug market.

The restructuring, spearheaded by newly appointed CEO Mike Doustdar, is expected to save the company $1.3 billion annually, funds that will be reinvested into research, production expansion, and global market growth. Notably, 5,000 of these job cuts will occur in Denmark, marking the largest layoff in the country’s history.

A Reuters sub-editor headlined the story by saying that Novo is “slimming down,” which, while witty, is unlikely to prove droll to those losing their jobs.

Novo Nordisk has faced a challenging year, with shares tumbling nearly 46% and revenue growth stalling as rival Eli Lilly’s $LLY ( ▲ 0.22% ) Zepbound overtook Wegovy in the U.S. weight-loss drug market. Analysts have pointed to misjudgments in the obesity market’s consumer-driven nature and an overly rapid expansion of company structures. 

Today on the ‘gram: Rest in peace

Post of the day: Never forget

Quote of the Day

Pokémon cards outperform Wall Street

What started as a cherished childhood hobby has morphed into a booming investment market. Pokémon trading cards, beloved since the franchise’s inception in 1996, have delivered jaw-dropping returns of approximately 3,821% since 2004 — dramatically outpacing the S&P 500’s 483% growth in the same period.

Justin Wilson from Oklahoma City’s collection, valued at $100,000, now stands alongside his traditional investments like a Roth IRA. The pandemic further fueled the Pokémon craze, as stimulus checks and lockdown boredom led many to explore alternative assets.

Pokémon’s appeal lies in card rarity, artwork, and nostalgia, with super-rare finds like Logan Paul’s $5.3 million “Pikachu Illustrator” card setting records. Retail and resale platforms — such as Target $TGT ( ▲ 0.82% ) , Walmart $WMT ( ▲ 2.23% ) , and eBay $EBAY ( ▲ 1.28% ) — have seen massive growth, with demand continually soaring.

While some warn of market volatility and a potential bubble, others argue the franchise’s enduring appeal, coupled with characters immune to “real-world” risks, makes Pokémon cards a unique and safe collectible asset. I’ll stick with the stock market, nonetheless, thanks.

Should you check your 401(k) today?

👍️ 

Yes.

Trump admin requests emergency ruling to remove Cook from Fed board

The Trump administration has asked an appeals court to remove Governor Lisa Cook by Monday, before the Fed's critical interest rate meeting next week. The request follows U.S. District Judge Jia Cobb’s recent ruling reinstating Cook after President Trump attempted to fire her, citing alleged misconduct.

Trump accused Cook of mortgage fraud, alleging she claimed two properties as “primary residences” in July 2021, which could result in lower mortgage rates and smaller down payments. Cook has denied the accusations. Judge Cobb ruled that Cook’s dismissal was illegal, stating the administration failed to meet the “for cause” requirement for removing Fed governors, which applies only to misconduct during their time in office. Notably, Cook joined the Fed Board in 2022.

The administration’s lawyers argued in an emergency appeal that Cook’s alleged actions “indisputably call into question [her] trustworthiness and whether she can be a responsible steward of the interest rates and economy.” The appeal seeks to overturn the lower court decision before Monday.

FTC inquiry probes AI chatbots acting as companions, effects on kids

The Federal Trade Commission has launched an inquiry into the potential risks posed by AI chatbots, particularly for children and teenagers. Letters have been sent to prominent companies — including OpenAI, Meta $META ( ▼ 0.14% ) , Alphabet $GOOG ( ▲ 0.51% ) , and Snap $SNAP ( ▲ 3.4% ) — asking about the steps they have taken to evaluate the safety of their chatbots and address concerns about their use by minors. 

The issue gained urgency after troubling incidents involving AI chatbots were reported. The parents of a 16-year-old boy from California, Adam Raine, are suing OpenAI, alleging that ChatGPT played a role in their son’s suicide. Similarly, the mother of a Florida teenager claims her son endured emotional and sexual exploitation from a chatbot before taking his life.

Companies like OpenAI and Meta have introduced new measures to protect teens with critics saying they’re too little, too late. OpenAI plans new parental controls, while Meta is blocking chatbot discussions with teens on sensitive topics such as self-harm and disordered eating.

Poll of the day: News Haiku time

The subject of this week’s News Haiku competition is that United Airlines and Delta are facing class action lawsuits after selling window seats without actual windows for an extra $100.

Poll results: You’re skeptical of buy now pay later

We asked you to “Please complete this statement: Buy now pay later...”

You answered:

🟨⬜️⬜️⬜️⬜️⬜️ ... is a convenient way to get what you want now, and I like it. (141)

🟩🟩🟩🟩🟩🟩 ... is a convenient way to overspend and accumulate debt, and I don't like it. (646 votes) 

787 Votes via @beehiiv polls