A roundup of some of the North American equities making moves in both directions today
On the rise
New Gold Inc. (NGD-T) rose 10.5 per cent after it announced plans to sell its Blackwater Project in B.C. to Artemis Gold Inc. (ARTG-X) for $190-million, including $140-million in cash upfront and $50-million in 12 months after closing.
The deal also includes a gold stream on 8 per cent gold produced from Blackwater, reducing to 4 per cent once approximately 280,000 ounces of gold have been delivered to New Gold.
Artemis Gold Inc. shares were up 29.9 per cent.
Gilead Sciences Inc. (GILD-Q) was up 0.8 per cent after a study published in medical journal Nature showed its antiviral drug, remdesivir, prevented lung disease in macaque monkeys infected with the new coronavirus.
Remdesivir is the first drug to show improvement in COVID-19 in human trials, and its progress in clinical studies is being closely watched as nations look for a treatment for the disease, which has infected more than 7 million people and killed over 400,000.
In the study, 12 macaque monkeys were deliberately infected with the new coronavirus, and half of them were given early treatment with remdesivir.
Macaques that received remdesivir did not show signs of respiratory disease and had reduced damage to the lungs, according to the study.
Details from the trial in monkeys were previously released by the U.S. National Institutes of Health in April, but those findings were not reviewed by peers - a step that validates a research study.
The authors of the study suggested that remdesivir should be considered as a treatment as early as possible to prevent progression to pneumonia in COVID-19 patients.
See also: Gilead shares rise on report of AstraZeneca’s interest in merger
U.S. luxury jeweler Tiffany & Co. (TIF-N), which is being bought by France’s LVMH for US$16-billion, was up 2 per cent in the wake of saying on Tuesday it had amended some of its debt agreements to bolster its liquidity amid the coronavirus pandemic after its quarterly sales sank 44 per cent.
Sources have told Reuters that LVMH Chief Executive Bernard Arnault has been exploring ways to potentially pressure Tiffany to lower the agreed price of US$135 per share, including by examining its compliance with its debt covenants.
However, Mr. Arnault has decided not to renegotiate the agreed price for now, sources told Reuters on Friday..
An LVMH spokesperson was not immediately available for comment.
New York-based Tiffany said on Tuesday it had ample cash on hand and was in compliance with all debt covenants as of April 30.
“I am confident that Tiffany’s best days remain ahead of us and I am excited we will be taking that journey with LVMH by our side,” Tiffany CEO Alessandro Bogliolo said in a statement.
On the decline
AltaGas Ltd. (ALA-T) slid 2.6 per cent in the wake of announcing after the bell on Monday that it has agreed to issue $500-million of senior unsecured medium-term notes with a coupon rate of 2.157 per cent, maturing on June 10, 2025.
The net proceeds will be used to pay down existing indebtedness under its credit facility and for general corporate purposes.
Freehold Royalties Ltd. (FRU-T) was lower by 6.8 per cent after it announced that it has received notices of reassessment from the Canada Revenue Agency “in which the CRA has denied the deduction of certain non-capital losses and other tax attributes in computing the company’s income for taxation years ending in 2015 to 2018.”
Raymond James analyst Jeremy McCrea said: “Although this deposit accounts for 10 per cent of the company’s balance sheet, we don’t believe in any way this should impact its leverage risk profile given a low starting debt to begin with. For reference, at year-end 2019, FRU holds $662-million in COGPE tax pools, and a further $31-million in other tax pools not considered non-capital losses. Ultimately, at current FFO, COGPE tax pools should be sufficient to reduce taxes to zero for the foreseeable future however assuming FFO returns to levels seen in 2019, FRU might be subject to a tax rate between 8-10 per cent going forward if its determined its non-capital losses don’t apply.”
Shares of Chesapeake Energy Inc. (CHK-N) plunged 66 per cent on Tuesday after Bloomberg reported it is preparing a potential bankruptcy filing.
According to the report, the move could hand control of the Oklahoma City-based company to senior lenders.
Boeing Co. (BA-N) slid 6 per cent in the wake of its deliveries worsened even further in May compared to April as the coronavirus pandemic’s crushing impact on airlines added to a year of crisis following the grounding of its 737 MAX planes, company data showed on Tuesday.
The U.S. planemaker said it handed over just four planes in May, down from six it delivered in April, its lowest total for the month in six decades and about 87 per cent fewer than it delivered to customers at the same time a year ago.
Deliveries are financially important to planemakers because airlines pay most of the purchase price when they actually receive the plane.
Customers also canceled orders for another 18 planes last month, including 14 MAX jets that were the company’s top-selling plane until a pair of crashes just over a year ago.
While Boeing resumed production last week and expects to make deliveries of the MAX in the third quarter, many airlines have canceled or deferred delivery as the industry faces the fallout of a total collapse in air travel since January.
Earlier on Tuesday, Reuters reported Emirates, one of the world’s biggest long-haul airlines, had laid off hundreds of pilots and thousands of cabin crew.
Boeing did score nine new orders for widebody planes and its deliveries included two 777 freighters, one NG-based aircraft for US military and one 767 freighter, but no passenger planes.
Macy’s Inc. (M-N) said on Tuesday its 450 reopened stores were performing better than expected, giving some respite for the department store chain that reported nearly US$1-billion in quarterly operating losses due to COVID-19 lockdowns.
The company’s shares slid 7 per cent, a day after Macy’s said it had raised US$4.5-billion to navigate through the fallout from the pandemic.
Macy’s, like most other non-essential retailers in the United States, was forced to shut nearly all its 800 stores in March to contain the spread of the coronavirus.
While a full economic recovery is expected to be years away, retailers like American Eagle Outfitters Inc, Abercrombie & Fitch and Macy’s have indicated a recovery in sales, with a surge in online orders.
Macy’s Chief Executive Officer Jeff Gennette said the company is now working to get the right merchandise in place for the crucial holiday season.
Macy’s said its preliminary sales fell to US$3.02-billion in the quarter ended May 2, from US$5.50-billion, in line with the company’s prior forecast.
The company reported a preliminary adjusted net loss of US$630-million, or US$2.03 per share, in the same period, compared to a profit of US$137-million, or 44 US cents per share, a year earlier.
With files from Brenda Bouw, staff and wires