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Prosecutions have been elusive since the military alliance began responding forcefully to suspected sabotage in the Baltic Sea

Just after midnight on Dec. 26, a team of Finnish commandos dropped from two helicopters onto the deck of a ramshackle Russian oil tanker in the Baltic Sea and ordered the ship’s crew to sail into port.

They were acting on the orders of Finnish officials who suspected the Eagle S had hours earlier dragged its anchor along the seabed to slice through a vital power cable between Finland and Estonia. The Finnish action also potentially prevented the ship from cutting another cable nearby, officials say.

It was the latest incident of suspected sabotage involving ships carrying Russian cargo in the region, and the first time authorities had boarded a suspicious vessel while it was under way.

Then came the real work: finding the evidence to prove sabotage.

Finnish law-enforcement officials questioned the crew and scoured the 750-foot-long ship, digging through its logs and inspecting its anchor, which was torn from its chain during the incident. But Finnish and other officials familiar with the probe say they weren’t able to uncover enough evidence to issue arrest warrants or for prosecutors to press charges related to deliberate wrongdoing.

The ship was released on March 2, but three crew members are still under investigation and have to remain in the country, Finland’s police said in a statement.

Proving sabotage is difficult and requires significant evidence or testimonies to support the finding, say investigators, prosecutors and officials involved in the investigations. To issue an arrest warrant or bring a case, prosecutors must provide substantial evidence of intentional wrongdoing, rather than an accidental and unnoticed dropping of an anchor.

“Even if you show it was deliberate, it’s extremely unlikely you’ll find a paper trail linking the incident to a state actor,” said Elisabeth Braw, an expert in combat below the threshold of warfare, who is writing a book on subsea geopolitical conflict.

The difficulties of prosecuting such cases are frustrating Western officials who are trying to combat what they say is a hybrid war against critical infrastructure in the West that they blame on Russia.

The Kremlin, which didn’t respond to a request for comment, has denied attacks on Western infrastructure in the past.

The North Atlantic Treaty Organization has taken a newly aggressive posture in response to such events in the Baltic, home to a handful of Russia’s ice-free commercial ports, and one of the busiest trade corridors in the world. But holding anyone accountable for the incidents is proving hard.

The Eagle S captain told police the Christmastime incident was an accident, according to people familiar with the investigation. Caravella LLC-FZ, the Emirati company which owns the ship, didn’t respond to requests for comment.

Having found no link between the damaged cable and the Kremlin or any other government, the Finnish government has released the ship, the people said.

To keep the ship until now, prosecutors have focused on lesser offenses such as environmental and customs violations, these people said.

Captains of other vessels have also blamed mistakes for recent damage their ships are linked to in the Baltic.

In November, the Chinese-flagged Yi Peng 3 was suspected of dragging its anchor for miles along the Baltic seafloor. Western intelligence agencies alleged in private at the time that the captain was acting on the orders of Russian operatives while the ship was moored in a Russian dock earlier that month, The Wall Street Journal reported.

Investigations by German and other European authorities, including a search of the ship that Beijing only permitted to take place on the condition that Chinese officials led it, didn’t result in evidence to support that allegation, people familiar with that probe told the Journal.

Beijing didn’t respond to a request for comment.

The possibility that the anchor had dropped accidentally is all but ruled out, investigators said, but they added there was a chance that gross negligence or bad weather had played a part.

Investigators established only that the FSB, Russia’s largest security service, which also manages the country’s borders, held the ship for two days after it was loaded in one of Russia’s Baltic ports. They weren’t able to find out why it was held. The FSB didn’t respond to a request for comment.

Across the world’s 450 subsea cable systems, spanning almost one million miles, more than 150 technical faults and other problems occur each year globally, according to the International Cable Protection Committee, a trade group. Up to 80% of cable-damage incidents are caused by accidents linked to commercial fishing and ship anchors, the ICPC said.

Overall trends in accidents are hard to assess but the number of incidents involving severe harm is increasing, said Braw.

Four major Baltic incidents, which damaged undersea cables and a gas pipeline, occurred over the past 16 months. They all involved ships that had been operating between Russian ports or were carrying Russian cargo. The Kremlin has denied wrongdoing.

The incidents prompted NATO to launch a new mission, Baltic Sentry. It is conducting naval patrols and enhanced drone, satellite and electronic surveillance of Baltic Sea areas that are packed with critical infrastructure such as data and power cables, as well as gas pipelines and offshore wind farms.

In the first incident of suspected sabotage, in October 2023, Chinese bulk carrier Newnew Polar Bear cut a data cable and a natural-gas pipeline with its anchor. The ship was allowed to continue its journey despite being under investigation.

The Yi Peng 3 cut two data cables in the same region in the November incident. The Danish navy effectively forced the ship to stop, and China ordered the captain to wait for investigators to board the vessel, which was loaded with Russian fertilizer.

A month later, Finland detained the Eagle S, registered in the Cook Islands, on suspicion it had cut the power cable to Estonia.

On Jan. 26, Vezhen, a Bulgarian bulk carrier that had just departed the Russian port Ust-Luga, was detained and boarded by Swedish special police after damaging a subsea cable, in the first deployment of NATO’s Baltic Sentry. The ship was detained and later released by Swedish prosecutors.

The owner said armed Swedish officers “aggressively” boarded the Vezhen.

NATO, inspired by Finland’s decisive raid on the Eagle S, will continue acting forcefully to deter attacks on critical infrastructure, said James Appathurai, NATO assistant deputy secretary-general in charge of hybrid warfare.

“The captains and crews of ships that are thinking of acts of sabotage should be aware,” he said.

As the U.S. and its Western allies tightened sanctions against Russian energy exports, Moscow started deploying warships to escort its “shadow fleet” of tankers in the Baltic, sometimes including powerful missile ships, according to several European officials.

The Eagle S severed one of the two electricity cables linking Finland and Estonia. The second cable might have been saved from potential damage by the Finnish coast guard’s fast action, said retired Dutch admiral Rob Bauer, who recently completed a term as NATO’s most senior military official.

“Whether it’s bad seamanship or negligence on the part of these ships, or whether it was planned by the Russians…we shouldn’t care. This is wrong,” said Bauer. “It’s a good signal to the Russians and others to see that we are taking action.”

After Denmark stopped the Chinese-flagged Yi Peng 3 in November, the ship spent over a month anchored in international waters in the Kattegat Strait between Sweden and Denmark before Beijing allowed investigators aboard.

China cooperated with the investigation, several European officials said. Beijing dispatched a delegation of 19 officers and investigators, of whom 14 came on board together with a team of 19 led by Germany and including European observers, according to a person who was present during the probe. All of the crew members were Chinese nationals.

The probe found that a security mechanism to prevent an accidental dropping of the anchors was operational and had to be manually disabled to drop anchor. The ship log showed the anchor was secured when it left the Russian port of Ust-Luga. The log didn’t record the system being disabled or the anchor being dropped mid-journey.

The ship, which is over two decades old, was in very poor condition and the crew appeared disorganized and uncoordinated, the probe found.

The 41-year-old captain first commanded a ship only months before the incident, having served as a senior officer for a decade. He told investigators he and his crew didn’t notice the dropped anchor because of high waves, which they blamed at the time for the ship’s reduced speed. The captain said he raised the anchor once the weather calmed and he noticed it was down.

When the ship lost nearly half of its speed due to the anchor drag, the automatic pilot switched itself off because it can’t operate at speeds below 6 knots, investigators found.

Investigators, who ran a computer model of the incident, found that the ship was sailing in somewhat turbulent weather conditions and that the scenario described by the captain was plausible.

They spent around five hours on board before allowing the Yi Peng 3 to continue, under an agreement with Chinese authorities.

People familiar with the investigation, which is continuing, say they have all but ruled out the possibility the anchor was dropped accidentally. The system that prevents the anchor from dropping accidentally was functioning, they said. One explanation could be gross negligence, they said. Deliberate action can’t be excluded, but there isn’t evidence to support that, they added.

The eight Eagle S crew members were banned from leaving Finland during the investigation. And the probe shifted focus to the negative environmental impact of the ramshackle ship loaded with Russian oil, manned by Georgian and Indian nationals. Investigators are also looking at potential customs and other violations that fall well short of sabotage, according to the officials.

Investigations into civilian vessels sailing under third-country flags will always face severe diplomatic, administrative and legal challenges, said Nick Thomson, a former CIA paramilitary officer who participated in clandestine naval operations.

Missions such as NATO’s Baltic Sentry should be selective because of the high costs and operation requirements, and they should rely instead on more underwater, surface and aerial drones to investigate and deter such incidents, he said.

Company says it will take it longer than expected to make Siri more personalized

Apple AAPL 1.59%increase; green up pointing triangle said it is delaying an upgrade to Siri that is enhanced by artificial intelligence.

The company, which has faced slumping iPhone sales in recent months, on Friday said that it would take it longer than expected to make Siri more personalized and to enable it to take action for the user within and across apps.

“It’s going to take us longer than we thought to deliver on these features and we anticipate rolling them out in the coming year,” the company said.

The delay follows recent efforts from Apple to make Siri more conversational, and an integration with OpenAI‘s ChatGPT, the company said.

In September, Apple unveiled a new generation of iPhones that put AI at the forefront in order to attract consumers through new AI features.

These tools, called “Apple Intelligence,” were set to include an improved Siri voice assistant and a variety of text-generation and photo-editing capabilities.

The Cupertino, Calif., company most recently reported iPhone sales for the key December quarter were down nearly 1% from the prior year, to $69.1 billion, a miss from the $70.7 billion analysts were projecting, according to FactSet.

The investor has been working behind the scenes at the tech-services firm and isn’t currently planning to nominate directors

Activist investor Mantle Ridge has built a more than $1 billion stake in Cognizant CTSH -0.39%decrease; red down pointing triangle Technology Solutions and believes shares of the tech-services firm are undervalued, according to people familiar with the matter.

The details

Mantle Ridge started buying up shares in the second half of 2022, when the stock was trading in the high $50s to low $60s per-share range. Cognizant shares now trade at around $83 per share, giving the company a market value of more than $41 billion.

Mantle Ridge has been privately engaging with Cognizant about the company’s progress on boosting its share price, the people said. (Cognizant named a new CEO, Ravi Kumar, in January 2023.)

The engagement reflects a new approach for the activist firm, which has so far elected to work behind the scenes at Cognizant. Mantle Ridge isn’t planning to nominate board directors at this time, the people said.

However, Mantle Ridge still believes Cognizant shares are undervalued and that the market doesn’t fully appreciate the progress that has been made, the people said. It believes the company has more room to grow and intends to remain closely engaged with management, they said.

Cognizant said in a statement that it has been constructively engaging with Mantle Ridge. Since Kumar’s appointment, it said it has improved performance and driven total shareholder return of approximately 40%.

Teaneck, N.J.-based Cognizant helps companies update their IT systems and outsource certain business functions. Its peer group includes Accenture, Infosys and Cap Gemini.

The context

Cognizant has grappled with stagnant growth in recent years, posting a 2% increase in revenue in 2024 after a slight decrease in 2023.

Mantle Ridge expects Cognizant should be able to quickly meet the growth targets made as part of its full-year guidance released in February, the people familiar with the matter said.

Kumar said in a February earnings call that the company is focused on having revenue growth among the best in the industry and expanding margins.

Cognizant is expected to host an analyst day later this month to discuss its focus on capitalizing on businesses looking to implement artificial intelligence.

Unlike many other activist investors, Mantle Ridge typically focuses on only one or two positions at a time. Earlier this year, the firm run by Paul Hilal secured three board seats and effectively ousted the chief executive of Air Products and Chemicals after a shareholder vote.

The CEO of OpenAI imagines a future where you’ll need to constantly demonstrate that you’re not a bot. His ‘everything app’ is the answer—but first, he needs to look deep into your eyes.

Imagine a world full of basketball-sized “Orbs” that stare deep into our eyes, capturing the unique pattern of our irises.

These ubiquitous Orbs would allow us to do anything requiring identification, online or in real life, from buying bread to paying taxes. It’s a vision reminiscent of other recent efforts—including Amazon’s attempt to replace credit cards with our palms, and Ant Group’s efforts in China to make it possible to pay with your face.

The big difference? The builders of an app called World—including Chief Executive Alex Blania and his co-founder Sam Altman of OpenAI fame—envision a time in the not-too-distant future when you can’t do much without an ocular check-in. AI agents will be so prevalent, and so humanlike, that we’ll need to repeatedly prove we’re real to prevent those AIs from masquerading as humans on everything from payment platforms to social networks.

To accelerate adoption of what World calls its “anonymous proof-of-human” system, the company recently launched a mini app store inside its app, which is available for iPhones and Android devices.

World’s mini app store is part of a broader strategy to create an “everything app.” These apps—also called “super apps”—are common throughout Asia, where WeChat, Grab, Alipay and KakaoTalk allow users to do everything from shopping and chatting to ordering a meal or a ride.

World’s mini app store, which currently includes services to send and receive cryptocurrency, chat with verified humans and access microloans, is a first step toward creating what Altman, Blania and their team hope will be a vast ecosystem reaching more than a billion people. And as the company’s identification system expands, they anticipate their main competitor will be Elon Musk’s own attempt at an everything app: X.

“I think it will take a while until we seriously collide,” Blania told me on Tuesday, “given that X is primarily now a social network.” The app formerly known as Twitter has yet to launch its payment service, a key component of Musk’s vision. Besides, World has yet to properly launch in the U.S. No Orbs to gaze into…yet.

Within about 12 months, however, Blania believes the two services will start to compete in earnest. If so, it would be a notable development in part because making everything apps work in the West has proved extremely difficult. The bottom line is that, for most people with an Android phone or iPhone who haven’t grown up in the tech ecosystems of Asia, those app stores already offer the versatility and flexibility that everything apps do.

Sam Altman’s involvement in World might also encourage competition between World and X, by virtue of Musk’s pugilistic nature and the already intense rivalry between Altman and Musk. World is no mere side project for Altman, says Blania, who speaks with him a couple of times a week: “He’s involved in essentially every major decision that I make.”

Few people in the U.S. have heard of World, formerly known as Worldcoin. If they have, it’s probably on account of the company’s unique biometric identification system, the Orb. So far, Orb-ing millions of people hasn’t proved popular with governments around the world, as more than a dozen have either suspended its operations in their countries or else examined its handling of personal data.

World investor and venture capitalist Ben Horowitz said on a recent episode of his podcast with Marc Andreessen that with the loosening of restrictions on crypto companies in the U.S., he anticipates World will become “legal” in the U.S. this year. At present, the company doesn’t scan eyeballs in the U.S. or allow Americans to hold its Worldcoin token, for fear of regulators, Altman has said. When I asked how long it will be until World sets up locations in the U.S. where people can walk in, present their irises and become part of the network, Blania declined to say. But, he adds, the effort is “top of mind” for him.

In general, Blania brushes aside concerns about regulators both in the U.S. and abroad.

“I know the properties of the system, I’m extremely convinced about its compliance, and about the fact that I think it exceeds the actual expectations of these regulators,” he says. “It’s just a matter of getting them to understand every part of the system.”

World recently hired a former X executive to be the company’s head of privacy.

Other systems that rely on biometrics have unnerved users and governments in the past. It’s easy to forget the hue and cry once raised about Face ID on the iPhone, the face-scanning technology most people now use to unlock their Apple devices. When it was introduced, there were concerns about it both as a potential security liability and because of the way it evoked mass-surveillance systems in China that rely on face recognition.

World says its network is anonymous and secure, and only proves you’re a person—but it could be made part of a broader identity system. One of World’s distinguishing features is that it is an “anonymous proof of human” system. That is, its eyeball scan can verify that you’re a human being and not an AI, but without additional software and systems, it can’t identify who you are. What could drive people to adopt a system like World’s will be the rise of ever-more-sophisticated AIs that will make doing business on the internet almost impossible without something like it, says Tiago Sada, chief product officer at the company.

World’s “proof of human” powers were a unique enabler of a new mini-app in the World app store called Credit, says Diego, the Argentina-based developer of the app, who goes by only his first name. Credit gives people microloans of between $5 and $100 with no collateral—but will ban users who default on loans. People can’t circumvent the ban by creating a new Credit account, because of their unique, durable, and bot-proof identifier on the World network, Diego says. The app has racked up 70,000 users in Argentina since its launch in December, and is turning a profit, he adds.

While it seems that the ambitions of both World and X put them on a collision course, there are also plenty of reasons to be skeptical about how likely they are to achieve their goals.

World has only Orb-verified 11 million people worldwide, despite the fact that it literally pays them—via Worldcoin crypto tokens—to get their eyeballs scanned. (At its start, World doled out 25 tokens per scan, roughly $25 at today’s prices, and now offers 16 tokens per scan.) And the launch date for X’s Money Account service is unclear. The company has said it will count Visa as its first partner. X did not respond to requests for comment.

Visa CEO Ryan McInerney said on the company’s most recent earnings call that X Money will use Visa’s systems to allow users to fund their “X Wallet” with a debit card, which will also enable peer-to-peer transactions on X.

X has vastly more users than World does, but it’s unclear how many people will be eager to entrust an Elon Musk-owned company with their financial lives.

In the end, it’s trust that is most likely to decide the fate of both companies. Blania says he’s sure that in time, regulators and privacy experts will validate his confidence in the security of World.

“The way this system is built, it is provably much more secure” than its potential competitors, he says. “It’s like actual privacy rocket science that I think has never been deployed in that way in the world.”

President Donald Trump’s drive to shake up the world order is creating some surprising winners.

As the U.S. stock market reels from tariff fears, German stocks are surging because the government has committed to almost $1 trillion in new spending on infrastructure and defense. That has also changed the outlook for bonds, pushing yields up by the most since the country reunified in 1990 on Wednesday, though they are still well below U.S. levels.

The sea change in policy is creating a giddy optimism in German markets not seen in decades. It flies in the face of the country’s hard-earned reputation for fiscal rectitude and its extreme reluctance, since the end of World War II, to step up military spending. The shift could be comparable to the fall of the Berlin Wall in 1989.

Germany’s response to the threats from the U.S. to pull back military support and to impose tariffs has been the polar opposite of Trump’s approach in his second term. While the U.S. president is swiftly slashing government jobs and boasting of billions of dollars of spending cuts, Germany is increasing the size of the state.

Even after retreating Friday, the blue-chip DAX index has gained 2.2% over the past five days. Since the start of the year, it has risen 16%, compared with a slight drop for the S&P 500.

The European Central Bank did its part to fuel the gains on Thursday, lowering interest rates by a quarter point, widening the gap in borrowing costs with the U.S. The Federal Reserve kept rates unchanged at its last meeting.

The surge in German bond yields has been dramatic, but it still leaves the 10-year Bund at about 2.8%. The yield on the 10-year Treasury note, while much lower than it was earlier this year, is just below 4.3%. That lower cost of capital is good for companies that need to borrow money to expand.

For investors, it isn’t too late to take advantage of the shift across the Atlantic. True, the rally in European defense stocks may have its strongest days behind it. Rheinmetall, the German defense contractor, is up about 90% this year. France’s Thales is up more than 70%, as is Italy’s Leonardo.

There are also areas that may still be under the radar. Stocks in countries near Germany may get a boost, particularly if other governments follow the lead of the biggest economy and step up spending. France’s CAC 40, Italy’s MIB, and Spain’s IBEX are also rising sharply.

There are also sectors to look at outside of defense. Germany’s infrastructure spending will be a boon for companies such as Heidelberg Materials, up about 40% this year, and Siemens Energy, which has gained 10%.

Banks are also benefiting. Deutsche Bank, the country’s biggest lender, is up 7% over the past five days and its rival Commerzbank is up 13%.

The biggest gains from this point will probably come from companies too small to be in the DAX index, Germany’s market benchmark. The DAX has outperformed smaller stocks even as the economy has languished because those big companies’ earnings and growth benefit more from sales abroad. Companies that need a vibrant domestic economy are due for a catch-up. The MDAX index is up just 14% over the past year, compared with about 30% for the DAX.

The Magnificent Seven stocks have lost their magnificence—and it may not be restored anytime soon.

None of the Mag Seven has performed well of late. Through Thursday trading, Tesla stock had tumbled 45% from its 52-week closing high of about $480, while Apple, Amazon.com, Alphabet, Meta Platforms, Microsoft, and Nvidia are off an average of 16% from their own peaks. Fears include a slowing economy due to uncertain U.S. trade policies, Chinese artificial-intelligence competition, and, in the case of Tesla, the impact of CEO Elon Musk’s political activity on auto sales. It’s ugly, and it can feel like there’s no end in sight.

Anyone familiar with technical analysis, however, knows that there is always a bottom; it’s just a question of how far a stock has to fall to reach it. Technicians use price charts to determine where investors may decide to buy or sell stocks. They look for support—a level on the downside that could attract the optimists who want to bet on the stock rising—and resistance—where the skeptics could decide to sell—for intimations of where shares could go next.

The 50-day and 200-day moving averages are considered particularly important. As their names suggest, they indicate the average of where the stock has traded over a period—50 days for shorter-term traders and 200 days for longer term investors.

The good news is that the Mag Seven stocks look due for a bounce, at least according to the charts. Most are close to their 200-day moving averages, which can act as a cushion for stocks, says Fairlead Strategies founder and market technician Katie Stockton. What’s more, most of the seven appear oversold, which means shares have gone down a lot, and quickly, reflecting a lot of fear all at once.

But all Mag Seven stocks aren’t created equal. Stockton is least fond of Apple and Microsoft, the two largest U.S. stocks by market value. Both have their critics. The bears say Apple’s iPhone 16 isn’t driving more users to upgrade, while Microsoft’s cloud growth has decelerated. But both have held up pretty well. At a recent $235, Apple is down 9% from its all-time high. At $397, Microsoft is off 15%. Neither stock looks ready for a big bounce, says Stockton.

She observes that Apple isn’t as oversold as the rest and Microsoft is below its 200-day moving average. Both look range-bound. Apple will likely trade between $220 and $250. Microsoft’s range looks to be $390 to $440.

Like Microsoft, Nvidia’s stock is also trading below its 200-day moving average, but it has also fallen further from its 52-week high—it’s down 26%—and has the potential for a bigger bounce, of, say, 20%. It also has a catalyst, with its GTC conference set to begin on March 17. If CEO Jensen Huang can work his magic, maybe that bounce happens sooner rather than later. It’s likely to be just a bounce, however. Nvidia will likely be range-bound for a while, Stockton says, after posting gains of 240% and 170% in 2023 and 2024, respectively.

Alphabet is sitting just below its 200-day moving average after dropping 15%, while Amazon is sitting right on it after falling 17%. Like Microsoft, both have been weighed down by decelerating cloud growth. The stocks, however, could be poised to gain about 10% to close the gap with their 50-day moving averages.

Tesla, the hardest hit of the group, may be the most tempting, Stockton says. Shares have tumbled just below their 200-day moving average but, at $263, are more than $100 below their 50-day moving average. Of the septet, Tesla has the largest gap, by far, between its two moving averages—and the most room to bounce if investors’ fears subside.

There are reasons Tesla stock is oversold and looking for a bounce. Early 2025 sales data from around the globe show year-over-year declines even as investors are still expecting growth. Weak numbers are feeding fears that CEO Elon Musk’s political activities are impacting Tesla’s brand and turning off core buyers—politically left-leaning people looking to go green.

While Tesla might be the most intriguing, Stockton’s favorite is Meta Platforms. At $628, Meta stock is down 15% from its 52-week high and still well above its 200-day moving average. It has other support near $630, while the charts point to possible advances to $750 or $930 in the year to come. “It’s stronger from a long-term technical perspective,” she says.

The charts also contain a warning for investors. If there’s a running theme, it’s that the Mag Seven stocks, for the most part, look like they are range-bound even if they do bounce back soon. After two years of stock market leadership—and big gains—Stockton expects a period of consolidation, where shares flatten out for a while. “It’s tough to make a [technical] case for any of these for [the] long term,” says Stockton.

That might be tough for investors to swallow after the average Mag Seven stock gained an average of 110% in 2023 and 60% in 2024. For now, trading in a range could be the best-case scenario.

While Stockton isn’t making a fundamental call on any of the stocks, fundamentally minded investors shouldn’t be too quick to dismiss the chart patterns, which reflect all the sentiment and news at any given moment. “You never abandon a chart,” says Stockton.

And in market seas as uncertain as these, the chart might be the best map we have.

Hims & Hers spent millions ramping up its weight-loss business. Now it’s losing access to its best drug.

The rapid rise of GLP-1 weight-loss drugs has come with a raucous side show—a wave of copycat drugs unbound by drug patents. The knockoff surge was led by Hims & Hers Health, the telehealth firm that began selling the drugs last spring.

Cheap, compounded versions of the weight-loss drugs have been a cottage industry for a few years, but it was the arrival of Hims, a multibillion-dollar public company, that brought the knockoff medicines into the mainstream. Hims stock soared in the months that followed, while the GLP-1 patent holders, Eli Lilly and Novo Nordisk, saw their stocks come under significant pressure.

Now the whole shake-up is coming to an end, even quicker than it began. And Hims shareholders could be left in an unhealthy state.

U.S. drug laws allowed compounding pharmacies to manufacture semaglutide and tirzepatide, the GLP-1 drugs sold by Novo Nordisk and Eli Lilly, as long as they were considered to be in shortage. The Food and Drug Administration recently declared an end to the shortages, though, meaning the compounding pharmacies need to stop making the drugs in bulk.

The abrupt end to the copycat business isn’t a surprise; the GLP-1 shortages were always bound to end. But in the interim, Hims & Hers spent untold millions ramping up its weight-loss business, mounting a marketing blitz that culminated with a minute-long Super Bowl ad in February.

Now that the products are on their way out, Hims & Hers faces a dilemma—justifying a stock price that soared on the massive opportunity in weight loss. Shares peaked near $73 in February. Today, Hims stock is trading around $41, with a market value of roughly $9 billion.

Before the company’s pivot to weight loss, shares of Hims traded around $15, for a market value of $3.1 billion. Without the ability to sell compounded semaglutide in bulk, those $6 billion in market value gains are at risk, as the company is forced to look elsewhere for growth, including older weight-loss treatments.

Hims says it still expects overall weight-loss sales of “at least $725 million” in 2025, or 30% of its overall projected revenue. The company wouldn’t say what that same figure was in 2024. What it has said is that GLP-1 sales were $225 million last year. Most of that amount seems likely to go away in 2025 with the shortages ending.

Hims executives had repeatedly said the company would sell personalized doses of GLP-1 drugs to a large number of patients after the shortages ended, an exception allowed under laws that regulate compounding.

In late February, though, Hims and Hers seemed to describe that opportunity as far smaller. “Personalized semaglutide dosages will supplement these core offerings for the subset of consumers for whom it is a clinical necessity,” Chief Financial Officer Yemi Okupe said on the company’s Feb. 24 earnings call. Shares fell 22.3% the following day.

A Hims’ spokesperson didn’t directly address questions about the change in strategy, instead directing Barron’s to a post from CEO Andrew Dudum about the company’s opportunity in personalized medicine.

On the call, Okupe said Hims’ “steady state weight-loss offering” would be “primarily composed” of generic weight-loss pills—not GLP-1 medicines—along with a generic version of an older GLP-1 injection called liraglutide, which it hopes to launch later this year.

In other words, the company plans to accelerate its weight-loss sales with less-effective drugs. That could prove challenging.

A company spokesperson told Barron’s that continued difficulty in getting GLP-1 drugs could make Hims’ treatments necessary for some patients.

Beyond that, Okupe has said Hims’ weight-loss consumers “value the benefits the platform brings beyond the medication.”

Hims is playing the long game. “Our capabilities allow us to be a leader today, while ongoing investments will position us to serve millions more Americans once semaglutide is off-patent in the coming years,” the spokesperson said. Novo Nordisk expects its Wegovy patent to expire in 2032.

Hims has reason to stay focused on weight loss. It has spent heavily on the opportunity. It paid an estimated $16 million for the Super Bowl ad that seemed targeted squarely at Robert F. Kennedy Jr., the new secretary of the Department of Health and Human Services, casting its cheaper GLP-1 weight loss offering as a Trump-era answer to high healthcare costs.

Hims’ overall marketing costs were up sharply in 2024, to $678.8 million from $446.6 million, while its total operating expenses climbed nearly 50% to $1.1 billion. The company also bought an FDA-regulated compounding pharmacy in the fall, called MedisourceRx, for an undisclosed sum.

Lilly and Novo, meanwhile, are targeting the weight-loss customers that have used Hims and other telehealth firms. In new ads, Lilly and Novo both call out compounded treatments as unproven. This past week, Novo also launched a new website selling Wegovy directly to cash-paying customers for well below the drug’s list price. Lilly has a similar offer for Zepbound. Meanwhile, insurance coverage for both drugs is expanding, further reducing the out-of-pocket cost for many patients.

Aside from the GLP-1 mess, Hims’ core business selling generic treatments for hair loss, erectile dysfunction, and other conditions looks healthy. Excluding GLP-1 sales, its revenue was up 43% in 2024 to $1.2 billion, and the semaglutide surge has likely grown the company’s brand recognition.

But at the recent price of $41, investors are pricing in much more than the core business. Wall Street expects Hims to grow earnings 9% this year to 58 cents a share, according to FactSet, giving the stock a price-to-earnings ratio of 70 times. It’s a pricey bet built on very optimistic scenarios.

If the weight-loss business slows, Hims investors could be left with a much slimmer stock.

Donald Trump is eager to flex U.S. hydrocarbon muscle, and mitigate trade deficits, by selling more liquefied natural gas. Beleaguered trading partners are happy to oblige, on paper. Both Japanese Prime Minister Shigeru Ishiba and European Commission President Ursula von der Leyen have promised to buy more.

Details promise to be devilish, however. The day he took office, the U.S. president canceled Joe Biden’s moratorium on permitting new LNG export terminals. That unleashes more than a dozen pending projects, which could double U.S. export capacity by 2028, according to Washington’s Energy Information Administration.

Such an investment flood, combined with a similar surge in the Persian Gulf petrostate Qatar, could tank the market, though. “We expect gas prices to fall in the coming years,” says Jacob Mandel, research lead at Aurora Energy Research.

Investors expressed their own queasiness in response to the initial public offering of Venture Global, which came three days after Trump’s inauguration. The company, which has two huge LNG projects in progress in Louisiana, lowered its target price by 40%. The stock has fallen another 40% in six weeks.

In market terms, the Trump administration is also talking to the wrong customers. Europe has been the top purchaser of U.S. LNG since Vladimir Putin cut off its Russian gas in 2022, gobbling more than 40% last year. But its appetite has probably peaked as it accelerates renewable energy and probably scales down energy-intensive industries like steel and fertilizers. “It’s hard to imagine a situation where Europe will need more LNG,” Mandel says.

Japan’s LNG demand already shrank more than 20% in the past decade and should fall further as population declines and Tokyo shifts back toward nuclear power, says Anne-Sophie Corbeau, a scholar at Columbia’s Center on Energy Policy.

Global demand growth depends on faster-growing Asian economies. “There’s a pervasive belief that India and Southeast Asia will come to the LNG market’s rescue,” says Clark Williams-Derry, energy finance analyst at the Institute for Energy Economics and Financial Analysis.

The mature markets can still play a role in U.S. LNG expansion, since producers generally pre-book most of their expected output through long-term contracts. European or Japanese utilities could step in as off-takers, then resell gas they don’t need on spot markets, explains Joseph Majkut, director of the energy security and climate change program at the Center for Strategic and International Studies. “They create a hedge for themselves that increases energy security,” he says.

Japan looks particularly keen on this trade, as its conglomerates can sell infrastructure along with excess gas to emerging LNG markets, Williams-Derry says. “Companies in Japan are becoming LNG pushers, looking to make money on the re-gasification terminals and pipelines, too,” he says.

Other Trump policy priorities could conflict with his LNG salesmanship. Tariffs on imported steel and aluminum will probably raise construction costs, Mandel says.

Lifting economic sanctions on Russia, which the Trump administration has dangled as part of a peace settlement in Ukraine, could shift markets more dramatically—unlocking Moscow’s own LNG expansion and possibly renewing flows of cheaper pipeline gas into Europe. “Russia has become one of the biggest questions again,” Corbeau observes.

In the long run, liquefied natural gas still looks like an expanding industry that the U.S. is well positioned to dominate. Global demand should increase by half by 2040, predicts industry consultant Wood Mackenzie. That may not be fast enough for an impatient president.

Alternative investments aren’t so “alternative” anymore. Once the rarefied domain of institutional investors and some sophisticated individuals, alts—from hedge funds to private credit to cryptocurrency—have increasingly pushed their way into the investment portfolios of wealthy people. They’re now hitting the mass market, too.

Alternative investments aren’t so “alternative” anymore. Once the rarefied domain of institutional investors and some sophisticated individuals, alts—from hedge funds to private credit to cryptocurrency—have increasingly pushed their way into the investment portfolios of wealthy people. They’re now hitting the mass market, too.

In a sign of their growing popularity, global alternative assets under management are expected to jump to $29.2 trillion by 2029, up 74% from $16.8 trillion at the end of 2023, according to research firm Preqin. Meanwhile, nine out of 10 financial advisors now use alts in client portfolios, and half of advisors allocate more than 10% of client portfolios to the category, according to a recent survey by alternatives-investing platform CAIS and consulting firm Mercer.

Little wonder, then, that alts have become a big theme among advisors in the latest Barron’s Top 1,200 ranking. This listing, which ranks the top advisors in each of the 50 states and the District of Columbia, is the largest of Barron’s four annual rankings of advisors. The group of 1,200 is both a handy place to find an advisor and an excellent barometer of industry trends.

The argument for alternatives is that they diversify portfolios—lowering overall risk—and offer the potential for juicy gains. If publicly traded stocks and bonds are the steak and potatoes of investment accounts, think of alternatives as the chimichurri.

“If we can get our client families to accept the illiquidity that comes with private investments, we can unlock investment themes that they haven’t been exposed to if they’ve been a typical retail investor with a 60/40 portfolio,” says Charlie Maxwell, co-chairman of Cresset, referring to the traditional investment allocation of 60% stocks and 40% bonds. Maxwell is No. 1 in Arizona in this year’s Top 1,200 financial advisors ranking.

Yet alts aren’t for every portfolio, particularly those geared toward the middle class, financial advisors say. And investors need to bring a discriminating eye to these investments. “Just because there is increased supply and demand doesn’t mean alternatives are right for all investors, and it doesn’t mean that all hedge funds or private-equity funds or real estate funds are created equal,” says Christopher Toomey, a private wealth advisor at Morgan Stanley Private Wealth Management.

To make good decisions about alternatives, investors should understand where alts could fit in their portfolios, what the risks are, and what benefits they bring in return for often high fees.

Technically, an alternative investment is any asset class you add to a stock and bond portfolio with the expectation that it might have higher returns than, and won’t correlate with, your foundational assets. Many alternative investments are funds made up of “private” investments—they aren’t publicly traded stocks or bonds, and they are largely outside the purview of regulators. Alternative funds may have complicated strategies and only be suitable for wealthy investors. Thus, asset managers typically offer them through financial advisors who can explain the details to clients.

There is nothing new about alternative investments. Generations upon generations have invested in real estate. Hedge funds and private equity were the rage in the 1980s and remain large parts of the alts landscape. Private credit gained traction after the 2008 financial crisis, when traditional banks were forced to reduce risky lending, and it has exploded since then. Many investors consider art, collectibles, and fine wine to be alts. And some are embracing cryptocurrency.

Alts historically have been reserved for investors who can afford to lock up big chunks of their wealth for long stretches. Hedge fund minimums can range from $100,000 to several million dollars, and investors may not be able to easily withdraw their funds for a year or more. The underlying securities are often illiquid (think how long it takes for a real estate transaction to close), so fund managers don’t let investors pull all their money out at once.

Then there are the fees: A private-credit fund might charge 1% to 2% of assets under management. On top of that, many alt funds often charge performance fees that can range from 10% to 20% of profits above a certain threshold of gains.

Among alts, private credit is having a moment. The market for lending outside the traditional banking system was estimated at about $1.5 trillion at the start of last year, up from $1 trillion in 2020, and is projected to grow to $2.6 trillion by 2029, according to Morgan Stanley.

“We’re seeing a lot of demand within private credit, particularly because you’re in an environment where interest rates are at elevated levels,” says Toomey. “If you look at traditional fixed income, spreads are relatively tight [meaning that corporate bonds aren’t yielding much more than Treasuries, which are less risky], while in the private-credit world, you can see low-double-digit type returns.” Those hefty returns are in contrast to traditional bonds, which currently have negative three-year returns.

Nucleus Advisors has more than one-third of its $3 billion of assets in alts, including much of its partners’ money. The New York–based firm currently owns “substantial amounts” of private credit in client portfolios but avoids large private-credit funds, says Jordan Waxman, founder and managing partner. “We focus on managers who are a little smaller, nimbler, and focused on senior secured credits,” says Waxman. “Typically these managers employ low-to-moderate leverage, and they generate income in a 10% to 12% range.”

On the hedge fund front, Waxman likes global macro funds, which can offer stock-like returns with low correlations to the stock market. Most of the best are closed to new money, but when they periodically open, Nucleus pounces. Waxman also likes royalties—investments that involve prepaying for a revenue stream from music, mining, or pharmaceuticals, for instance.

Morgan Stanley’s Toomey sees promise in funding the infrastructure needed to support the booming artificial-intelligence field. In addition, he points to opportunity in the private-investment secondary market, where many funds are in need of cash to pay out to their shareholders. “We’re hearing that this is a great time to be buying assets,” Toomey says.

Bitcoin and other cryptocurrencies have gradually gained acceptance among mainstream investors and financial advisors, although plenty of skepticism remains. The $3 trillion global cryptocurrency market is dominated by Bitcoin, with a more than 50% market share. Crypto famously holds the promise of big returns at the cost of wild volatility.

But Matthew Hougan, chief investment officer of Bitwise Asset Management in San Francisco, says that over crypto’s 15-year history, small allocations have boosted portfolios’ risk-adjusted returns if held at least three years and rebalanced as needed. “It isn’t for every investor, but for many investors with a long time horizon, allocating 1% to 5% to crypto can make a lot of sense,” he says.

Nucleus has been investing in the crypto space for about five years, but more in blockchain technology than cryptocurrency, says Waxman. “Crypto as a category is very interesting from the venture capital point of view,” he says. “There’s seed investing that’s also very interesting.”

Terms like “hedge funds” and “private equity” may conjure visions of outsize profits, but Waxman says alternative investments serve a dual role in his clients’ portfolios: “We are a big believer that you can get excellent returns and lower your overall portfolio risk if you find really good alternatives.”

Uncovering those gems means being clear-eyed about the risks. Management with a proven record is a must. And different assets carry different kinds of risks. Geopolitical events can affect commodities, regulation can impact crypto, and interest rates can affect real estate, for instance.

Although the payoff for taking those risks can be attractive, not everyone needs alts in their portfolio, says Matthew Somberg, owner of Gottfried & Somberg Wealth Management in Glastonbury, Conn. “Most retail investors, if they’re trying to achieve mid- to high-single digit returns, will be able to accomplish their goals through a traditional 60/40 periodically rebalanced portfolio,” he says. “And I don’t know that there’s a huge need for the person who has $1 million or $2 million in their investment portfolio to carve out a significant allocation to alternatives.”

Nonetheless, asset managers are coming for the mass market.

Liquid alternative investments are mutual funds or exchange-traded funds that provide exposure to alternative strategies but are relatively inexpensive, can be traded daily, and carry low investment minimums. Several ETFs have recently been proposed to or approved by the Securities and Exchange Commission to give retail investors access to private equity, private credit, and hedge fund–like strategies. The SPDR SSGA Apollo IG Public & Private Credit ETF (ticker: PRIV), which launched in late February, features a private-credit allocation as high as 35%. The Pacer PE/VC ETF (PEVC), launched in early February, provides exposure to private equity and venture capital investments.

Although alt-flavored ETFs allow more investors to participate in previously exclusive markets, some financial advisors are skeptical about whether they can deliver the benefits of alts without the sacrifices—high fees, lockup periods, and gates on exits—required by most traditional alts.

But so-called liquid alternatives can also make sense for wealthy investors. Somberg uses them for easier diversification since they’re easier to buy and sell. “Rebalancing a portfolio is very important, and if you own something that isn’t liquid, it can make rebalancing the rest of the portfolio more complicated,” he says.

Investor interest in alts tends to surge when markets get choppy, says Sean Connor, president and CEO of global private wealth at Blue Owl Capital, a leading alternative-asset manager. “We have noticed that every time there’s a big selloff with high correlation and lots of volatility, we tend to see a pretty meaningful increase in interest in what we do,” says Connor.

If volatile markets do lie ahead, as many investing pros believe, and alts prove to have added value to portfolios, these funds should win new investors, Connor reasons. “It’s easier to prove your value” during such times rather than “when the markets are just up and to the right,” he says.

Don’t invest in alternatives just because your neighbor does. As with any investment, you should know whether and why they should be part of your portfolio, says Toomey. “I think a lot of times there is a sensationalism about investing in alternative asset classes,” he says, “and the investors don’t really understand how it fits within their overall investment plan.”

Connor encourages investors to ask their investment advisor about negative scenarios. “I think the first question you should ask about any investment is: What’s the worst that can happen?” he says. “How low can it go?”

Anyone recommending alts for your portfolio should be able to explain their specific benefits and risks, and how they align with your financial goals and risk tolerance. They should provide clear reports about the investment’s performance and fees.

Financial advisors such as Somberg say they are more likely to trust established managers that run larger funds. “I’m going to be more comfortable using a really well-known manager than some firm I’ve never heard of that is creating a private-credit fund,” he says. “If I saw something out there from a smaller firm that was offering 12% or 13% or 14%, I would get a little nervous.”

Alternative investments are catching on as investors learn about their potential to provide diversification and boost returns. But don’t just jump on the bandwagon. Which alts you buy, if any, depends on your unique situation and goals. As with any investment, making careful, informed choices is a must.

Stephen Schwarzman and Larry Fink are increasingly all up in each other’s business. Just look at BlackRock’s new Panama Canal deal.