Commuters gather at Bay and Wellington Streets, during evening rush hour, in Toronto, in this file photo.Ian Willms/The Globe and Mail
Home Capital profit falls
Home Capital Group Inc. reported a decline in first-quarter profit on Thursday and said the damage to its reputation that the business has sustained in recent weeks had resulted in "material uncertainty" about its ability to secure funding in the future.
The alternative mortgage lender's profit fell to $58-million, or 90 cents a share, in the first three months of the year. That was down from $64.2-million, or 92 cents a share one year earlier. The company had delayed releasing its earnings by more than a week and said results were prepared on a "going-concern basis," but added that issues such as regulatory proceedings, credit-rating downgrades and vacancies in the roles of CEO and CFO had "understandably shaken the confidence of the company's stakeholders." Story (Niall McGee and Jacqueline Nelson)
Hydro One stock sale hits a wall
Ontario's move to unload a $2.8-billion stake in Hydro One Ltd. has hit a standstill after investors balked at the stock sale, leaving underwriters with as much as half of the shares unsold.
The province's cash-strapped Liberal government announced the huge offering Monday, selling 120 million shares at $23.25 apiece to a syndicate of investment banks on a bought-deal basis. That means the shares were purchased up front by the underwriters in hopes of reselling them quickly to public investors.
But tepid investor demand for the issue means the underwriters, led by Royal Bank of Canada and Canadian Imperial Bank of Commerce, were holding as much as $1.4-billion worth of stock as of Thursday, according to people familiar with the situation. Story (Tim Kiladze and Jeff Lewis)
Real Matters stock flat in long-awaited IPO
Real Matters Inc. joined an exclusive club of publicly listed Canadian tech companies, becoming only the third such company since 2014 to raise more than $100-million in its initial public offering.
Unlike those other recent tech IPOs, Real Matters – which provides software tools to banks and lenders for real estate appraisals critical to the home-mortgage market – did not see the same kind of opening-day share price bump of either Kinaxis Inc. (up 14 per cent in its 2014 debut) or Shopify Inc. (up 51 per cent in its 2015 opener).
"I don't even know what it's trading at," Real Matters president and chief executive officer Jason Smith said on Thursday morning, after he "rang the bell" at the Toronto Stock Exchange to kick off the trading in his company's shares. (At the TSX, it's actually a large box that guests can depress to kick off the trading day.) About an hour after the interview, the share price fell below the $13 IPO price after opening at $15. The stock closed at $12.89. Story (Shane Dingman)
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DAILY DEALS
The Canada Pension Plan Investment Board (CPPIB), the country's biggest public pension fund, is considering a bid for Dominion Diamond Corp and is studying the miner's books, people familiar with the process told Reuters. Story
Verizon Communications Inc snapped up wireless spectrum holder Straight Path Communications Inc in a $3.1 billion deal, roughly double rival AT&T's initial offer, as Verizon seeks an advantage in the race toward a 5G network. Story (Reuters)
Dow Chemical Co. and DuPont Co. will reassess how the chemical giants plan to separate into three companies following their merger, after shareholders of both companies raised questions about the details of each new company. Story (WSJ)
ELSEWHERE IN FINANCE
Wells Fargo & Co. is having a hard time pleasing anyone.At its annual investor day on Thursday, the second-largest U.S. lender by market value lifted the targeted annual savings figure from its cost-cutting program to $4 billion from $2 billion by the end of 2019. Story (Bloomberg)
Global stock markets are at or close to record highs. Interest rates are on the path to normality. Most big Wall Street banks are delivering bumper revenue growth. This is surely a good time for traders and bankers to feel a bit better about their employment prospects -- and, yes, their pay.Just remember, it's unlikely to last long. Story (Bloomberg)