A roundup of some of the North American equities making moves in both directions today
On the rise
Well Health Technologies Corp. (WELL-T) soared after it accelerated its acquisition spree on the weekend, saying it would buy fellow Vancouver health-services company CRH Medical Corp. (CRH-T) for US$292.7-million.
The company said the deal would be largely financed by a concurrent $295.5-million private placement led by Hong Kong billionaire Li Ka-shing with support from unnamed institutional investors. Well added that it would also use some of its cash pile and a line of credit from Canadian Imperial Bank of Commerce and HSBC Holdings PLC.
Led by former TIO Networks Corp. founder Hamed Shahbazi, Well has amassed a group of 27 health clinics in British Columbia, Quebec and California while building out a network of “allied health” clinics that provides physiotherapy, sleep and other services. It offers digital clinical tools, too, that the company says serves more than 2,200 clinics in Canada and the United States.
- Josh O’Kane
Westport Fuel Systems Inc. (WPRT-T) was up after Reuters reported Amazon (AMZN-Q) ordered hundreds of trucks that run on compressed natural gas as it tests ways to shift its U.S. fleet away from heavier polluting trucks.
Amazon has ordered more than 700 compressed natural gas class 6 and class 8 trucks so far, according to Amazon.
The engines, supplied by a joint venture between Cummins Inc and Vancouver-based Westport, are to be used for Amazon’s heavy duty trucks that run from warehouses to distribution centers. More than 1,000 engines that can operate on both renewable and non-renewable natural gas have been ordered by the supplier, according to a source familiar with the situation.
Natural gas emits approximately 27 per cent less carbon dioxide when burned compared with diesel fuel, according to the U.S. Energy Information Administration.
Cathedral Energy Services Ltd. (CET-T) rose after saying industry veteran Tom Connors has been tapped to replace president and CEO Scott MacFarlane next month as he retires from the Calgary-based directional and horizontal drilling company.
Mr. Connors has worked in various leadership roles at much larger Ensign Energy Services Inc. over the past 18 years, including helping expand Ensign’s directional services in Canada and with buying and integrating of two directional drilling businesses.
Cathedral says it is issuing 500,000 units to Mr. Connors at 20 cents per unit or $100,000, with each unit consisting of a common share and a half-share warrant that allows the holder to buy a share for 24 cents in the next three years.
It says it will issue an additional 650,000 units to Mr. Connors paid for through a loan of $130,000.
Aegis Brands Inc. (AEG-T) was up after announcing it has signed a deal to sell its Second Cup Coffee Co. operations to Quebec-based Foodtastic Inc.
The company says the sale price includes $14-million in cash, plus a post-closing earn-out.
Aegis Brands says the deal will strengthen its balance sheet and allow it to accelerate its growth strategy through acquisitions.
Foodtastic is a franchiser of multiple restaurant concepts.
The Second Cup Ltd. changed its name to Aegis Brands as part of a plan to diversify beyond coffee shops.
In addition to Second Cup, Aegis Brands owns the Ottawa-based Bridgehead coffee shop chain and Hemisphere Cannabis Co.
See also: Second Cup to shutter more cafes, sell coffee in grocery stores as work-from-home trend hits sales
Tesla Inc. (TSLA-Q) jumped after it said on Monday it had invested around US$1.5-billion in bitcoin and expected to begin accepting payment for its cars and other products with it in the near future, prompting a 7-per-cent jump in the electronic currency.
The announcement came after two weeks in which comments from Chief Executive Elon Musk encouraged small-time investors to buy bitcoin and meme-based digital currency Dogecoin as well as shares of U.S. video game chain GameStop
Mr. Musk said a week ago in a tweet that bitcoin was “on the verge” of being more widely accepted among investors.
Analysts said the move by Tesla was liable to prove a game changer for the currency.
“I think we will see an acceleration of companies looking to allocate to Bitcoin now that Tesla has made the first move,” said Eric Turner, vice president of market intelligence at cryptocurrency research and data firm Messari.
Meanwhile, Chinese government officials have met representatives from Tesla reports from consumers about battery fires, unexpected acceleration and failures in over-the-air software updates, according to a Chinese regulator.
China’s State Administration for Market Regulation said in a social media post on Monday that its officials, along with those from the Ministry of Industry and Information Technology, Ministry of Emergency Management, Cyberspace Administration and Ministry of Transportation, had met Tesla “recently,” without giving a date.
The officials urged Tesla to operate according to China’s laws and protect customer rights, the regulator said.
Tesla is building Model 3 electric sedans and Model Y sport-utility vehicles at its Shanghai factory. It sold 15,484 China-made vehicles in January.
On the decline
Demand for Hasbro Inc. (HAS-Q) toys linked to Star Wars and The Mandalorian helped it beat fourth-quarter revenue and profit estimates on Monday as families turned to games during the pandemic-hit holiday season.
After opening higher, shares slid after the toymaker also reported a 43-per-cent jump in annual online revenue to over US$1-billion.
Parents have been spending more on toys to keep their children occupied due to limited vacation options and as U.S. schools hold classes online, boosting sales for Hasbro and rival Mattel Inc during the crucial holiday period.
Revenue from Hasbro’s gaming unit, which houses brands such as “Jenga” and “Scrabble,” rose 21 per cent in the quarter, while franchise brands, its biggest segment, that includes collectible cards game “Magic: The Gathering,” rose 7 per cent.
“Global point of sale increased last year, despite lockdowns and retail disruption, and 2021 is starting with strong year-over-year momentum,” Chief Financial Officer Deborah Thomas said in a statement.
Buoyed by the strong quarter, Hasbro plans to launch toy and game lines for its preschool brands Peppa Pig and PJ Masks later this year.
The Play-Doh maker’s net revenue rose about 21 per cent to US$1.72-billion in the three months ended Dec. 27, beating estimates of US$1.69-billion, according to a Refinitiv IBES estimate.
Net earnings attributable to Hasbro, however, fell to US$105.2-million, or 76 US cents per share, from US$267.3-million, or US$2.01 per share, a year earlier.
The company incurred US$34.7-million in charges related to its purchase of Entertainment One, the firm behind Peppa Pig, while selling, distribution and administration costs also rose.
Excluding items, Hasbro earned US$1.27 per share, topping estimates of US$1.14.
Shares of videogame retailer GameStop Corp. (GME-N) were down after early gains as recent social media-hyped trading hysteria in other stocks appeared to be fizzling out.
GameStop and other companies including cinema operator AMC and headphone maker Koss have seen wild gyrations in their stocks over the past two weeks as amateur investors on forums such as Reddit’s WallStreetBets acted in concert to bid up stocks that some U.S. funds had bet against.
The rally, which catapulted GameStop shares to as high as us$483 from around us$20 before they fell back to about us$64, has drawn the attention of regulators, although Treasury Secretary Janet Yellen said on Sunday it was too soon to say whether new policies or regulations were needed to deal with the volatility.
See also: As GameStop craze fades, droves of novice investors face a reckoning
With files from staff and wires