A humorous look at the companies that caught our eye, for better or worse, this week
S&P/TSX Composite Index (STAR)
Sure, I lost nearly 12 per cent in 2018. But that was last year. This year’s going to be different, I promise! Just give me another chance, please. I won’t let you down. Listen, I know exactly what went wrong last year and I’m not going to make the same mistakes again. You have my word, okay? Look, I even rose in the first week of 2019. That’s a good sign, right? C’mon, just give me some more money. Things will be different this time.
Investors knew Apple’s first-quarter guidance would be bad – but not this bad. Citing lower iPhone sales in China where a slowing economy is hurting demand, the technology giant warned that revenue for the quarter ended Dec. 29 would be about US$84-billion – down from US$88.3-billion a year earlier and well below Apple’s previous guidance of at least US$89-million. If it’s any consolation, Warren Buffett – whose Apple stake plunged by an estimated US$4-billion in Thursday’s sell-off – is losing more money than you are.
For Aphria investors, the bad trip continues. Shares of the beleaguered marijuana producer continued to fall this week even after Aphria received an unsolicited – and highly unusual – all-stock offer from an obscure U.S. company called Xanthic Biopharma Inc., a.k.a. Green Growth Brands Ltd. Not only does the conditional offer significantly undervalue Aphria, but Aphria itself also owns an indirect stake in Green Growth. What’s more, some Aphria directors have had business dealings with the Schottenstein family that backs the U.S. suitor. What’s that skunky smell?
As brutal as the stock market has been, some investors are actually making money. Shares of Celgene soared after Bristol-Myers Squibb agreed to buy the drug maker for US$74-billion in one of the biggest pharmaceutical deals ever. Assuming the merger is approved by shareholders and regulators, it would create the fourth-largest pharmaceutical company in the United States. It would also present a challenge for whoever has to come up with a name for the new company. Bristol-Myers Squibb Celgene Corp., anyone?
Hudson’s Bay (STAR)
Shocking but true: A department store’s shares actually rose. After tumbling about 35 per cent in 2018 amid a string of quarterly losses, the battered stock of Hudson’s Bay rebounded after an entity controlled by HBC’s executive chairman Richard Baker agreed to acquire nearly 18 million common shares of the retailer at $9.45 each from the Ontario Teachers' Pension Plan Board. This would be the same Ontario Teachers’ Pension Plan Board that, along with other institutional investors, voted against Mr. Baker’s very modest $54.8-million pay package last year.