A humorous look at the companies that caught our eye, for better or worse, this week
Sitting in a movie theatre seems so … prepandemic. But Cineplex is hoping that $5 movie tickets, enhanced cleaning protocols and physically distanced reserved seating will entice customers back to the big screen. Even as the company began reopening theatres in several provinces this week, however, the stock tumbled after Cineplex announced a first-quarter loss of $178.4-million and warned of “significant doubt about the company’s ability to continue as a going concern” if it fails to secure additional financing. Not exactly an uplifting script.
Business quiz! Shares of Moderna fell after the drug maker: a) announced that its experimental novel coronavirus vaccine “does not appear to prevent coronavirus infections, but does seem to be highly effective at curing the hiccups”; b) had to close one of its laboratories after drunken scientists were caught using test tubes for cranberry and vodka shooters; c) delayed the Phase 3 trial of its coronavirus vaccine candidate, which was expected to start next week, in order to make changes to the trial plan. Answer: c.
Restaurant Brands International (STAR)
Why did the person cross the road? Because he wanted a fried chicken sandwich at Popeyes. Even as the coronavirus has shut restaurants around the world, same-store sales at Popeyes’ U.S. stores – most of which have remained open for takeout and delivery – have been up “in the very high 20s” on a percentage basis recently, owing to its popular chicken sandwich, parent Restaurant Brands said. Canadians will soon learn what the fuss is about, as the sandwich is being tested in Alberta and is expected to launch in select Ontario markets this summer before a national rollout in the fall. Don’t forget physical distancing in those around-the-block lineups.
“Yay, the FedEx truck is here … for the third time today.” With people ordering more stuff online than ever before, FedEx’s ground-delivery business posted a 20-per-cent surge in revenue for the fiscal quarter ended May 30. That helped the company report adjusted earnings of US$2.53 a share, which were much better than analysts expected. Residential deliveries aren’t as profitable as business-to-business shipments, because trucks typically have to cover long distances and drop off packages one at a time, but with the pandemic putting a dent in commercial deliveries, FedEx will take all the orders it can get.
One thing Tesla investors aren’t lacking is optimism. Thanks to a jump in its stock price after second-quarter deliveries topped expectations, Tesla this week became the world’s largest car maker by market capitalization – unseating Toyota, which sold about 25 times as many vehicles and had 10 times Tesla’s revenue in the most recent fiscal year. Well, no sense getting bogged down by the numbers when investors are making a fortune on Tesla’s soaring stock.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.