Stars and Dogs
The Globe's stars and dogs for the week
A humorous look at the companies that caught our eye, for better or worse, this week
Walt Disney (STAR)
Mickey Mouse, meet Bart Simpson. In a blockbuster deal that could reshape the entertainment landscape, Disney agreed to pay $52.4-billion (U.S.) for most of Rupert Murdoch's 21st Century Fox. By merging Disney's assets (including Star Wars, Marvel and Pixar) with Fox's extensive film and TV properties (including The Simpsons, regional sports networks and cable channels such as FX), the House of Mouse will have more ammunition for its own streaming services. Excessive media concentration? Don't have a cow, man.
DIS (NYSE) $111.27 (U.S.), up $7.04 or 6.8% over week
"Look, honey! I walked 14 steps to the fridge!" As useful as a Fitbit is for tracking your exercise habits, people aren't walking out of their way to buy the devices. The shares fell after Stifel analyst Jim Duffy cut Fitbit to "sell" from "hold," saying the company had failed to "inspire meaningful new consumer interest in the category." With Fitbit still deriving most of its revenue from basic fitness trackers even as the market moves to more complex smartwatches, Fitbit investors are running – not walking – away.
FIT (NYSE) $6.30 (U.S.), down 67¢ or 9.6% over week
Empire Co. (DOG)
Clean up in aisle seven. Shares of grocery retailer Empire tumbled after the company, which is still recovering from the bungled acquisition of Safeway four years ago, said it will convert up to one-quarter of its 255 Safeway and Sobeys stores in Western Canada to its discount FreshCo banner over the next five years. With Empire also posting a second-quarter loss of $23.6-million, including one-time restructuring costs, investors have egg on their portfolios.
EMP.A (TSX) $24.01, down $1.84 or 7.1% over week
Test your business knowledge! Shares of Linamar jumped after the company: a) announced plans to convert all of its auto-parts plants to marijuana production facilities; b) disclosed that, for the past three years, it has spent all of its free cash flow on bitcoin; c) announced the $1.2-billion purchase of Winnipeg-based harvesting-equipment maker MacDon Industries, beefing up Linamar's agricultural machinery business. Answer: c.
LNR (TSX) $72.50, up $4.72 or 7% over week
Teva Pharmaceutical (STAR)
Layoffs? Dividend cuts? Whoo-hoo! Shares of troubled Teva Pharmaceutical surged after the world's largest generic drug maker said it will slash 14,000 jobs – or about one-quarter of its global work force – and suspend its common share dividend as it seeks to shed about $3-billion in costs. As Teva struggles under $35-billion (U.S.) of debt and faces growing competition from cheaper rivals, investors think cost-cutting is just what the doctor ordered.
TEVA (NYSE) $18.61 (U.S.), up $2.55 or 15.9% over week