A look at some of the North American equities moving in both directions
On the rise
Shares of Tesla Inc. (TSLA-Q), which surged more than 700 per cent in 2020, continued to gain on Friday after the vehicle maker launched a cheaper variant of the Model Y, bringing its price closer to that of its Model 3 sedan, its least expensive car.
The new standard range Model Y is priced at US$41,990, only US$4,000 more than the entry level Model 3, according to the company’s website.
Tesla’s stratospheric rally has helped Chief Executive Officer Elon Musk surpas Amazon’s top boss Jeff Bezos to become the world’s richest man, Bloomberg News reported on Thursday.
Shares in the company jumped nearly 8 per cent to end Thursday’s session at US$816.04, putting its market capitalization at US$774-billion and making it Wall Street’s fifth-most-valuable company, just behind Google-parent Alphabet Inc and ahead of social media giant Facebook Inc.
Tesla’s new Model Y variants come days after the carmaker beat Wall Street targets for 2020 vehicle deliveries, driven by a steady rise in electric vehicle adoption, but narrowly missed its ambitious full-year target of half a million deliveries.
U.S.-listed shares of Baidu Inc. (BIDU-Q) gained on plans to form a company to make smart electric vehicles (EV) with manufacturing to be carried out at plants owned by automaker Geely.
Baidu, the leading search engine company in China, will take a majority stake and absolute voting power in the new company.
The venture will revamp some of Geely’s existing car manufacturing facilities to make the vehicles, with in-car software input from Baidu and engineering know-how from Geely, sources told Reuters.
The companies are in talks to use Geely’s EV-focused platform, Sustainable Experience Architecture (SEA), for future product development, one of the sources, who declined to be identified as the plan was private, said.
Baidu, which is developing autonomous driving technology and internet connectivity infrastructure, did not immediately respond to a request for comment. Geely declined to comment.
Cisco Systems Inc. (CSCO-Q) was flat in the wake of Acacia Communications Inc. announcing it has terminated a US$2.84-billion merger deal after it failed to obtain regulatory approval from China.
The merger, initially expected to close in the second half of Cisco’s full-year 2020, was cleared by the United States, Germany and Austria, but had been under regulatory review by China, the only remaining closing condition of the deal.
Acacia said of Friday the deal was unable to receive approval from Chinese government’s State Administration for Market Regulation within the timeframe contemplated by the merger agreement.
Cisco in 2019 agreed to buy Acacia in cash, as it sought to garner a bigger chunk of 5G spending by telecom companies.
On the decline
Shares of Toronto-based Sierra Metals Inc. (SMT-T) reversed course and fell on Friday after it announced before the bell it is considering the sale of part or all of the company, an asset divestiture, merger or other business alternatives as part of its strategic process.
Sierra said CIBC World Markets is assisting the board in reviewing its options.
“The Company has not made any decisions related to any specific strategic alternatives at this time and there can be no assurance that the exploration of strategic alternatives will result in a transaction,” it said.
Boeing Co. (BA-N) slid a day after announcing will pay more than US$2.5-billion in fines and compensation in a settlement with the U.S. Department of Justice over two plane crashes that killed a total of 346 people and led to the grounding of its 737 MAX jetliner.
The settlement, which allows Boeing to avoid prosecution, includes a fine of US$243.6-million, compensation to airlines of US$1.77-billion and a US$500-million crash-victim fund over fraud conspiracy charges related to the plane’s flawed design.
Boeing said it would take a US$743.6-million charge against its fourth-quarter 2020 earnings to reflect the deferred prosecution agreement, a form of corporate plea bargain. Boeing had put aside reserves of $1.77 billion in prior quarters to provide for compensation to airlines.
The Justice Department deal, announced after the market close on Thursday, caps a 21-month investigation into the design and development of the 737 MAX following the two crashes, in Indonesia and Ethiopia in 2018 and 2019, respectively.
Moderna Inc. (MRNA-Q) retreated from early gains on Friday after Britain’s medical regulator approved the drugmaker’s COVID-19 vaccine for use and agreed to purchase an additional 10 million doses of the shot.
Health Canada approved the vaccine in late December.
Three COVID-19 vaccines have now been approved for use in Britain, with Pfizer//BioNTech’s shot and one developed by Oxford University and AstraZeneca already being rolled out.
The Moderna shot is not expected to play a part in the first stage of Britain’s vaccine rollout. Britain now has 17 million doses of Moderna’s vaccine on order, and supplies will begin to be delivered to the UK from the spring once Moderna expands its production capability.
“We have already vaccinated nearly 1.5 million people across the UK and Moderna’s vaccine will allow us to accelerate our vaccination programme even further once doses become available from the spring,” health minister Matt Hancock said.
Massachusetts-based drugmaker Sarepta Therapeutics Inc. (SRPT-Q) plummeted after it said on Thursday its experimental gene therapy to treat a muscle-wasting disorder did not achieve statistical significance in one of the main goals of a study.
Duchenne muscular dystrophy (DMD) is a rare degenerative neuromuscular disorder, which affects about one in 3,500-5,000 male births worldwide and causes severe progressive muscle loss and premature death.
The setback comes as Pfizer Inc dosed its first patient in a late-stage study testing its treatment for DMD. Some analysts have suggested that Sarepta’s gene therapy seems to have a better safety profile than Pfizer’s in early trials. Sarepta’s drug, SRP-9001, however, met one of the goals of the study, the company said.
Micron Technology Inc. (MU-Q) fell after the chipmaker forecast second-quarter revenue above estimates as a global shift to remote work and a recent uptick in 5G smartphone adoption drove demand for its chips.
Micron struggled with low prices for its chips over the past year because of an abundance of supplies, but Chief Executive Sanjay Mehrotra said supplies are expected to tighten in 2021 as the global economy recovers from the pandemic.
“We are past the bottom, and the industry is in tight supply across major market segments,” he told investors on a conference call.
The chipmaker expects current-quarter revenue of US$5.8-billion, plus or minus US$200-million, while analysts on average were expecting $5.50 billion, according to IBES data from Refinitiv.
The company’s revenue for the first quarter rose about 12 per cent to US$5.77-billion, beating estimates of US$5.73-billion.
With files from staff and wires