A roundup of some of the North American equities making moves in both directions today
On the rise
Shares of Apple Inc. (AAPL-Q) were higher a day after Reuters exclusively reported that the iPhone maker is aiming to produce a passenger vehicle by 2024 with its own battery technology.
Central to the company’s strategy is a new battery design that could “radically” reduce the cost of batteries and increase the vehicle’s range, Reuters reported.
“If Apple has achieved a battery breakthrough, this could serve as a driver to finally move forward with production given battery costs are one of the main obstacles to mass adoption of EVs,” Evercore analyst Amit Daryanani wrote.
It remains unclear who would assemble an Apple-branded car, but sources have said they expect the company to rely on a manufacturing partner to build vehicles.
“It is clear to us that Apple has ambitions in the transportation space, which could result in meaningful revenue for the company, the emergence of Tesla’s first true competitor, and further evidence that traditional auto is in a tight spot, absent any partnership with a tech giant,” wrote Gene Munster, managing partner at Loup Ventures.
Shares of Guelph, Ont.-based Canadian Solar Inc. (CSIQ-Q) rose on Tuesday after announcing the sale of its remaining 30-per-cent ownership of the Big Fish SPV S.r.l. and Iron SPV S.r.l. solar projects to Falck Renewables.
Both projects are located in Sicily, Italy, and have a total expected capacity of more than 290 MWp.
“We are pleased to have partnered with Falck Renewables in this initiative which allowed us to broaden our portfolio in Italy and has brought development progress to our projects. Going forward, our strategy in Italy will focus on growing and diversifying our pipeline, currently in excess of 1.3 GWp across various regions in the country, with around 140 MWp expected to reach notice-to-proceed (NTP) in 2021. We will also focus on securing long term energy sale agreements and maximize the value we generate from our projects,” said CEO Shawn Qu in a release.
CAE Inc. (CAE-T) increased in the wake of announcing it has acquired Merlot Aero Ltd., a flight crew management software company, in deal worth at least US$25-million.
Under the agreement, CAE is paying US$25-million, plus up to an additional US$10-million in the form of an earn-out.
CAE says the deal helps grow its business beyond pilot training.
The company is best known for its aircraft simulators, but has been looking to broaden its operations.
It says the acquisition of Merlot marks its expansion into digital flight crew management.
CAE says the deal is its third announced acquisition since November.
Open Text Corp. (OTEX-T) was up on Tuesday after saying it has reached a deal with the U.S. Internal Revenue Service to settle a US$830-million claim related to its taxable income for its 2010 and 2012 financial years.
Under the agreement, OpenText will pay US$290-million to the IRS in U.S. federal taxes and interest.
The company says the settlement also eliminates about US$90-million in future withholding taxes that OpenText had expected to pay over the next 10 years.
Open Text expects the settlement to result in a US$290-million charge for the quarter ended Dec. 31, the second quarter of its 2021 financial year.
In connection with the settlement, Open Text says it also expects to make certain associated state tax and interest payments of US$10-million to US$15-million in the 2021 calendar year.
OpenText says it believes the settlement to be in the best interest of all stakeholders and provides finality to a long-standing matter.
Exercise bike maker Peloton Interactive Inc. (PTON-Q) said late Monday it would buy peer Precor in a deal valued at US$420-million as it looks to boost its U.S. manufacturing capacity and market share for fitness products.
Peloton’s shares, which have gained more than 400 per cent this year, rose further on Tuesday.
Demand for streaming exercise services and home work-out equipments soared during the COVID-19 pandemic from people largely working from home.
“We have seen a ton of growth. No one would wish a global pandemic on anybody, but it’s been a tailwind for our business,” Peloton President William Lynch said on Monday.
However, the surge in demand forced Peloton Chief Executive John Foley to say last month that wait time for certain products had been “unacceptably long.”
The acquisition adds 625,000 square feet of U.S. manufacturing capacity for Peloton with in-house tooling and fabrication, product development, and quality assurance capabilities in North Carolina and Washington. The company would be able deliver products to its customers sooner on the back of the addition.
Russel Metals Inc. (RUS-T) gained after saying it has signed a deal to buy Sanborn Tube Sales of Wisconsin Inc.
Financial terms of the deal for the metals service centre were not immediately available.
Russel Metals says the Sanborn operation is based in Pewaukee, Wis., and is close to its three Wisconsin service centers.
Russel Metals CEO John Reid says Sanborn is a well-established company that has been both a customer and supplier to Russel’s Wisconsin division.
The company says that over the past several years Sanborn has generated annual sales of approximately US$19-million across a diverse base of industrial customers.
On the decline
Walmart Inc. (WMT-N) fell after being sued by the U.S. Justice Department, which accused the retailer of fueling the opioid crisis in the country and ignoring warning signs from its pharmacists.
The lawsuit, filed in the U.S. district court in Delaware, alleges Walmart failed to take its gatekeeping duties as a pharmacy seriously.
Walmart, the world’s biggest retailer, created a system that turned its 5,000 in-store pharmacies into a supplier of highly addictive painkillers, dating as early as June 2013, the lawsuit said.
The Trump administration’s allegations come months after the retailer filed a lawsuit in October against the federal government, seeking clarity on the roles and legal responsibilities of pharmacists and pharmacies in filling opioid prescriptions.
The opioid epidemic has claimed the lives of roughly 450,000 people across the United States since 1999 due to overdoses from prescription painkillers and illegal drugs.
TMAC Resources Inc. (TMR-T) plummeted after the Federal government rejected Chinese state-controlled Shandong Gold Mining Co. Ltd.’s planned takeover of the junior Canadian gold miner of concerns the deal may pose national security risks.
In May, Shandong proposed an all-cash acquisition of TMAC for $1.75 a share, valuing the miner at $207.4-million, or about 4 per cent more than its market price at the time. Shareholders of TMAC voted overwhelmingly in favour of the deal in June and it received regulatory approval in China.
The takeover generated a national debate about sovereignty in Canada’s Far North and whether China should be allowed to gain a meaningful economic foothold in the Arctic. TMAC’s Doris gold mine is situated in Hope Bay, Nunavut, near tidewater in the Northwest Passage, a highly strategic shipping route connecting the Atlantic Ocean to the Pacific.
In a statement, Jason Neal, the chief executive of Toronto-based TMAC said the company was “disappointed” by the government’s decision.
- Niall McGee
A day after its shares ended sharply lower in their S&P 500 debut, with losses accelerating after news of potential future competition from Apple, Tesla Inc. (TSLA-Q) lost further ground on Tuesday.
Tesla ended down 6.5 per cent on Monday from a record high in the previous session, its steepest one-day drop in over a week. Losses steepened towards the end of the session after Reuters reported that Apple is targeting 2024 to produce a passenger vehicle that could include its own breakthrough battery technology.
The decline in Tesla’s shares accounted for about 0.1 percentage points of the S&P 500′s 0.4-per-cent decline for the day, according to Refinitiv data.
The electric car maker, headed by billionaire Elon Musk, is the most valuable company ever admitted to Wall Street’s main benchmark and accounted for a 1.69-per-cent weight in the index ahead of Monday’s trading. The shares had surged almost 60 per cent since mid-November, when Tesla’s debut in the S&P 500 was announced.
See also: Tesla heads to the S&P after meteoric rise and some investors want more
Fitbit Inc. (FIT-N) slid after Australia’s antitrust regulator on Tuesday rejected an undertaking by Alphabet Inc-owned Google that sought to address competition concerns over its planned US$2.1-billion acquisition of the fitness tracker maker.
The development comes as Google remains at loggerheads with the Australian government over a number of issues, including proposed laws that will make Australia the first country in the world to force Google and Facebook to pay for news sourced from local media outlets.
In June, the Australian Competition and Consumer Commission (ACCC) voiced concerns over the Fitbit deal, warning Google’s acquisition would give it too much of people’s data, potentially hurting competition in health and online advertising markets.
Google had sought to address those concerns by offering a court enforceable undertaking that it would behave in certain ways toward rival wearable manufacturers, not use health data for advertising and, in some circumstances, allow competing businesses access to health and fitness data.
Boeing Co. (BA-N) reversed early gains after relatives of 737 MAX crash victims on Tuesday urged the European Union Aviation Safety Agency (EASA) to delay approving the aircraft’s return to service, saying there are unanswered questions about its safety.
Last month, the U.S. Federal Aviation Administration cleared the jet following design changes around systems involved in two crashes that together killed 346 people in 2018 and 2019, sparking a global grounding and safety reviews.
EASA has said it could formally lift its own ban next month, once public and industry feedback on its conditions for putting the jet back into service have been studied.
In a letter to EASA Executive Director Patrick Ky and in comments filed with the agency, relatives and friends of Ethiopian Airlines crash victims said it should first finish its analysis of the modified aircraft and complete its safety report on the crash.
Boeing shares started higher after Alaska Airlines (ALK-N) agreed to buy 23 737 MAX 9 jets, confirming an Oct. 8 Reuters report that the U.S. planemaker was in talks with Alaska to stimulate demand for the jet’s comeback.
The order, worth some US$2.96-billion at list prices before expected steep discounts, comes less than three weeks after European budget airline Ryanair also placed a lifeline order for 75 Boeing 737 MAX jets.
Airbus is set to beat Boeing to be the world’s largest jetmaker for the second year in a row, ending 2020 by resuming deliveries of its A380 superjumbo to Emirates, though its final deliveries are likely to have dropped 35 per cent from 2019 due to the pandemic.
With files from staff and wires
David Leeder