A roundup of some of the North American equities that made moves in both directions
On the rise
Canopy Growth Corp. (WEED-T) rose 3.7 per cent on Monday after it Corona beer maker Constellation Brands Inc.’s subsidiary exercised warrants to buy shares in the marijuana producer, increasing its stake to 38.6 per cent.
The warrants, which were originally issued on Nov. 2, 2017, were exercised at $12.9783 per common share for a total of about $245-million, the companies said on Friday.
The common shares represented about 5.1 per cent of the issued and outstanding common shares of Canopy.
Constellation now indirectly holds a total of 142.25 million common shares of Canopy, 139.75 million warrants to purchase common shares and $200-million principal amount of senior notes.
Laurentian Bank Securities analyst Chris Blake said: “WEED remains one of a few and best capitalized companies in the sector. This investment is yet another endorsement of the long-term attractiveness of the global cannabis market which STZ and WEED estimate to be more than $250-billion globally within 15 years. It also provides WEED the financial flexibility to build out the infrastructure required to be the global leader.”
See also: Five Canadian cannabis stocks likely to survive COVID-19 crisis
Gilead Science Inc. (GILD-Q) was up 0.4 per cent after its antiviral drug remdesivir was granted emergency use authorization by the U.S. Food and Drug Administration for COVID-19 late Friday, clearing the way for broader use of the drug in more hospitals around the United States.
During a meeting in the Oval Office of the White House with President Donald Trump, Gilead Chief Executive Daniel O’Day called the move an important first step and said the company was donating 1.5 million vials of the drug to help patients.
The donation is expected to be enough for at least 140,000 patients, depending on the number of days they need to be treated.
Gilead said on Wednesday the drug, which is given by intravenous infusion, had helped improve outcomes for patients with COVID-19, the respiratory disease caused by the novel coronavirus, and provided data suggesting it worked better when given earlier in the course of infection.
See also: Picard: There’s no silver bullet for curing coronavirus
Carnival Corp. (CCL-N) was higher by 3 per cent it said on Monday it planned to restart some of its cruise trips from North America in August as it tries to recover from the coronavirus pandemic, which has battered its business.
The company said it planned to resume cruises on eight ships from Miami, Port Canaveral and Galveston on Aug. 1, while operations in all other North American and Australian markets would remain suspended through Aug. 31.
On the decline
Air Canada (AC-T) dropped almost 9 per cent after the COVID-19 pandemic drove it to a $1-billion loss in the first quarter as most air travel came to a halt.
Air Canada burned through $880-million in liquidity in the first three months of 2020, as it reduced its schedule by 90 per cent since March 16.
“Our first quarter results reflect the severity and abruptness of the impact that the COVID-19 pandemic has had on Air Canada, which started to be felt across the global airline industry in late January with the suspension by many carriers, including Air Canada, of services to China,” Air Canada said in a statement accompanying its results on Monday morning. “The impact was exacerbated during the month of March with mandated social distancing, unprecedented government-imposed travel restrictions in Canada and around the world and the shutting down of economies.”
Air Canada outlined measures it is taking to preserve its operations, but said a recovery to 2019 revenue levels and capacity is three years away.
- Eric Atkins
First Cobalt Corp. (FCC-X) gave up early gains and finished flat after it said on Monday it expects to start making cobalt sulfate around the turn of the year and become North America’s first producer of the component crucial for batteries used in electric vehicles.
The company’s plans for its cobalt refinery in Ontario, would be a step towards helping North America reduce reliance on China, which dominates the supply chain for rechargeable lithium-ion batteries.
First Cobalt commissioned a feasibility study which showed the refinery producing an annualized 1,000 tonnes of cobalt or 5,000 tonnes of cobalt sulfate by late 2020 or early 2021.
The second phase of the project would mean the refinery producing 5,000 tonnes of cobalt or 25,000 tonnes of cobalt sulfate by the fourth quarter of 2021, which would be a significant proportion of the global refined cobalt market.
U.S. airline stocks fell on Monday after Berkshire Hathaway Inc. chairman Warren Buffett said Saturday at the company’s annual meeting it has sold its entire stakes in the four largest carriers in April, saying “the world has changed” for the aviation industry.
The conglomerate had held sizeable positions in the airlines, including an 11-per-cent stake in Delta Air Lines (DAL-N), 10 per cent of American Airlines Co. (AAL-Q), 10 per cent of Southwest Airlines Co. (LUV-N) and 9 per cent of United Airlines (UAL-Q) at the end of 2019, according to its annual report and company filings.
The conglomerate was one of the largest individual holders in the four airlines and in 2016 disclosed it had begun investing in the four carriers after avoiding the sector for years.
Airline stocks have been hard hit by the near-collapse of U.S. travel demand amid the coronavirus pandemic.
Delta was down 6.4 per cent while American, Southwest and United lost 7.7 per cent, 5.7 per cent and 5.1 per cent, respectively.
See also: Warren Buffett is optimistic? Pessimistic? No, realistic
Mr. Buffett’s Berkshire Hathaway Inc. (BRK-B-N) was down 2.6 per cent after it posted a record quarterly net loss of nearly $50 billion on Saturday and admitted performance is suffering in several major operating businesses.
Berkshire said most of its more than 90 businesses are facing “relatively minor to severe” negative effects from COVID-19, the illness caused by the novel coronavirus and now punishing the global economy, with revenue slowing considerably in April even at businesses deemed “essential.”
The BNSF railroad saw shipping volumes of consumer products and coal fall, while Geico set aside money for car insurance premiums it no longer expects to collect. Some businesses cut salaries and furloughed workers, and retailers such as See’s Candies and the Nebraska Furniture Mart closed stores.
Mr. Buffett also allowed Berkshire’s cash stake to rise to a record US$137.3-billion from US$128-billion at the end of 2019.
General Electric Co. (GE-N) slid 4.5 per cent after it said on Monday it was planning to cut its global workforce in the aviation unit by as much as 25 per cent this year, including both voluntary and involuntary layoffs, due to business disruptions caused by the COVID-19 pandemic.
The job cuts are part of the US$3-billion in cost and cash savings announced by the company last month.
Tyson Foods Inc. (TSN-N) shares fell after it said it expects to continue idling meat plants and slowing production because of the new coronavirus, signaling more disruptions to the U.S. food supply.
Tyson reported lower-than-expected earnings and revenue for the quarter ended on March 28, before meat processors began shutting plants as the respiratory illness spread through slaughterhouses. Shares of the Jimmy Dean sausages maker fell 7.9 per cent as the company said increased demand for meat at grocery stores had not completely offset lost sales to restaurants.
U.S. President Donald Trump last week deemed meat-packing plants “critical infrastructure” that must stay open, in an executive order to protect the nation’s supply. Tyson, Smithfield Foods Inc and JBS USA have shuttered plants in recent weeks, limiting pork and beef production and fueling fears about shortages.
“We have and expect to continue to face slowdowns and temporary idling of production facilities from team member shortages or choices we make to ensure operational safety,” Tyson said in a statement.
Tyson warned prior to Trump’s order that millions of pounds of beef, pork and chicken would vanish from U.S. grocery stores because of plant shutdowns. Its chairman said the U.S. “food supply chain is breaking” as farmers have been euthanizing livestock because they lost markets for them.
Tyson projected meat sales will fall in the second half of the year as restaurants and other food outlets suffer as consumers stay at home during the pandemic. The company said it does not expect chicken prices will improve for the rest of its fiscal year.
“The volume increases in retail have not been sufficient to offset the losses in foodservice and as a result, we expect decreases in volumes in the second half of fiscal 2020,” Tyson said.
With files from staff and wires
David Leeder