The Mystery $30 Million Crypto Bets on a Trump Win
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After an earnings warning, CVS, one of the U.S.'s biggest health care companies, is getting a new executive and a new strategy. And we look at the mystery of the $30 billion wave of bets on a Trump presidential win. Over the past couple months, and especially in the past few weeks, there have been a small number of polymarket accounts that have been plagiarized.

plowing millions of dollars into bets that Trump will win. Plus, why auto safety regulators are investigating Tesla's self-driving technology. It's Friday, October 18th. I'm Tracy Hunt for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today.

CVS Health has replaced its top executive as it warned that its coming earnings report will once again fall short of Wall Street expectations. The company today said David Joyner will take over as the new chief executive of the struggling health care giant. Joyner has been president of CVS Caremark, the company's pharmacy benefit manager, as well as an executive vice president of CVS.

Joining us now to discuss what all this means is WSJ reporter Anna Wilde-Matthews. So, Anna, what exactly is going on at CVS? Why has it been struggling? Well, the core of the issues has really been the Aetna health insurance unit of CVS. And this is not unique to Aetna, but Aetna's maybe had a bit of a more extreme situation with medical costs in its Medicare business rising.

running higher than projected. And largely because of that, CVS has had to repeatedly redo its earnings projections, bringing them down pretty much every quarter of this year. What are we expecting when we finally get its earnings report? Well, they've already given us a little preview. They've once more said that they are backing away from the guidance that they'd given for their earnings for 2024.

And then they've said that essentially their earnings per share are going to come in substantially below what analysts were expecting, although this is partially due to a couple special charges. And they've warned that, again, medical costs are running higher than expected. And a measure called the medical loss ratio, which is sort of the ratio of health care costs to premiums and an insurer, is going to be higher than analysts expected.

What challenges will the company face as it tries to turn around? A key challenge is medical costs and getting those maybe back under the rate they're seeing now. And they also have just a lot of work that they want to do in Medicare. They've promised Wall Street that they will be improving their margins in the Medicare business. And so

To do that, they're making changes to the designs of their Medicare plans that will kick in next year. And we'll just have to see how it works. Ana Wildey-Matthews is a health reporter for The Wall Street Journal. Federal regulators are investigating Tesla's automated driving software after the system was linked to four crashes, including one in which a Tesla vehicle fatally struck a pedestrian.

The U.S. National Highway Traffic Safety Administration, the country's top auto regulator, said today it was looking into Tesla's driver assistance system, which the company markets as full self-driving. Nizza described this latest probe as a preliminary evaluation. This new action by the agency underscores the regulatory hurdles that Tesla will face as it seeks to roll out driverless robotic cars onto the roads. Tesla did not respond to a request for comment.

In U.S. markets, technology stocks lifted the S&P 500 and Nasdaq Composite, which rose 0.4 and 0.6 percent, respectively. The Dow rose 0.1 percent into fresh record territory. Coming up, the mystery $30 million wave of pro-Trump bets. That's after the break.

I'm Jimmy Veilkind from the Wall Street Journal, and I'm hitting the road again for a new series on the election, looking at how big campaign arguments are playing out on the ground. Like, how's the economy shaping people's thoughts? My daughter went a lot further when Trump was in there. And how is Kamala Harris's sudden rise being received? She's already proven herself to be a formidable opponent for Trump. Join me for the ride.

Look for a Chasing the Vote in the Wall Street Journal's What's News feed. Vice President Kamala Harris and former President Donald Trump are neck and neck in the polls. But in one popular betting market, the odds have skewed heavily in Trump's favor, raising questions about a recent flurry of wagers and who's behind them.

Over the past two weeks, the chances of a Trump victory have surged on PolyMarket, a crypto-based prediction market. The candidates were in a dead heat at the start of October, but yesterday, bettors were giving Trump a 62% chance of winning, while Harris' chances were 38%.

But the surge might be a mirage manufactured by a group of four polymarket accounts that have collectively pumped some $30 million of crypto into bets that Trump will win. Joining us now to discuss what might be going on here is Wall Street Journal reporter Alexander Osipovich.

Alex, where are these new bets on Trump coming from? So over the past couple months and especially in the past few weeks, there have been a small number of polymarket accounts that have been plowing millions of dollars into bets that Trump will win.

Most of them are going into the main market on Polymarket, which is just will it be Trump or Harris that win the election? But there are also some side markets like will Trump win Pennsylvania and will Trump win the popular vote elections?

So some of the money has been going to those two. The four accounts have been acting kind of in concert with each other. They seem to have all been funded from the same source, according to blockchain data, and they have stepped up their bets regularly over time, acting kind of in unison with each other. So it appears very likely that the four accounts are all connected and run by the same person or entity. So what could be going on here?

It's unclear what is going on exactly. The simplest explanation is that it is just a well-heeled better who really thinks Trump is going to win, has decided to put their money where their mouth is.

and is laying on a very large bet. The other possibility that some people have put forward is that it's essentially an influence campaign where money is being spent in order to make it look like Donald Trump is doing better on the betting markets.

And therefore, he has momentum and he's going to win. And if we wake up after Election Day and it turns out that Kamala has won, it could be a data point to help him argue that it was a stolen election. As you might expect, opinions about who is behind these trades and why they're doing it split along partisan lines.

Is polymarket the only place where we notice bets on a Trump win? Well, one thing that some observers have pointed out is that there are betting markets other than polymarket, and they have shown a similar trend. I think polymarket probably was first where Trump really started to rally over Harris. But in time, other markets such as Betfair in the UK, some U.S.-regulated markets that recently launched election betting like Kalshi, they have also shown Trump gaining against Harris.

Potentially, that could be an artifact of arbitrage. So you have different pricings in different markets. They tend to gravitate together. So one market sort of leads the others. But it also could be that just the people who are willing to bet their money see that Trump has a strong chance and they're putting their money down. Alexander Osipovich is a reporter for The Wall Street Journal. Thank you so much, Alex. Thank you for having me.

Let's stay with the presidential elections. North Carolina has a higher percentage of active voters under 25 than almost any other swing state. And North Carolina was also one of the few battleground states that saw the kind of pro-Palestinian demonstrations seen on campuses in the Northeast and California.

For our multi-part series, Chasing the Vote, reporter Jimmy Bilkine has been traveling to the states that will decide the election to find out what's important to the voters there. And he's joining us now to discuss how this younger demographic could sway the vote in North Carolina. Jimmy, what were some of the big issues weighing on the young voters in the state?

Well, young voters are focused on many of the things that older voters are focused on. People told me their top issues were abortion rights, gun control, the economy, and the southern border. Some students talked about the cost of higher education. And I really found that people who had joined the protests did say it was a top issue, but not necessarily a single issue.

Several of the demonstrators said that they remain concerned about the situation, but that it's not enough to really sway their vote. But there are some people, including in a movement called Abandon Harris, who say that the situation in the Middle East is unacceptable. And while they may have previously supported Democrats, they will not vote for Kamala Harris. In a state that's as close as North Carolina,

where Donald Trump won in 2020 by about 74,000 votes. Every vote matters, and it could have an impact even if there are only a limited number of single-issue voters. So how are former President Donald Trump and Vice President Kamala Harris trying to reach younger voters? Democrats have in place a concerted effort to reach younger voters. They started campus outreach in the spring, months earlier than usual,

And the state Democratic chair spent September touring college campuses around the state, talking to students about bread and butter issues, bound ballot races, as well as the presidential campaign. Republicans are aiming at a more broader-based message. Many of the college campuses certainly lean to the political left.

But Republicans say that they are campaigning at college football games, targeting both current students and recent alumni, talking about the economy and hoping to appeal to some more conservative members in more conservative spaces. Jimmy Vielkind is a political reporter for The Wall Street Journal, and you can listen to his report from North Carolina in our Chasing the Vote podcast this Sunday.

And finally, Apple's Vision Pro is struggling to attract major software makers to develop apps for the device. The company launched its augmented reality headset, betting it would kickstart an industry still in its infancy.

But without enough killer apps, certain users have found the device less useful and are opting to sell it. WSJ reporter Aaron Tilley explained to our Tech News Briefing podcast why many developers remain on the sidelines. The main reason is the user base, the small user base that exists for the Vision Pro, just the return value.

On investment for developers, it's going to be extremely low because the user base is so tiny and the device is so expensive, there's really no potential for a mass market device. So a lot of developers, people who have experience working on virtual reality or augmented reality sort of apps and devices, they're waiting for a cheaper device.

device from Apple that will make it a more mass market device. And you can hear more about this in today's Tech News Briefing podcast. And that's What's News for this week. Tomorrow, you can look out for our weekly markets wrap up, What's News in Markets. Then on Sunday, as we heard a little while ago, WSJ's Chasing the Vote travels to North Carolina to find out how young voters are weighing the war in the Middle East at the polls.

That's on What's News Sunday. And we'll be back with our regular show on Monday morning. Today's show was produced by Anthony Bansi and Pierre Bien-Aimé with supervising producer Michael Cosmitas. Michael LaValle wrote our theme music. Aisha Al-Muslim is our development producer. Scott Salloway and Chris Zinsley are our deputy editors. And Falana Patterson is the Wall Street Journal's head of news audio. I'm Tracy Hunt. Thanks for listening. ♪

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