A roundup of some of the North American equities making moves in both directions today
On the rise
Billionaire Richard Branson’s space tourism company Virgin Galactic Holdings Inc. (SPCE-N) said on Monday it has signed up with NASA to develop a program to promote private missions to the International Space Station, sending the shares of the company up more than 12 per cent.
As part of its agreement with the Johnson Space Center, the space tourism company will identify entities keen to buy private missions and develop training packages, as well as aid in transportation, on-orbit and ground resources.
NASA is leaning heavily on private companies built around shared visions for space exploration, as it gears up for a long-term presence on the moon and prepares for a manned mission to Mars.
The space launch system, which is set to debut next year, is NASA’s ride for transporting humans from the Earth to the moon by 2024.
Apple Inc. (AAPL-Q) was up 2 per cent after it announced it will switch to its own chips for its Mac computers, saying the first machines will ship this year and ending a nearly 15-year reliance on Intel Corp. (INTC-Q) to supply processors for its flagship laptops and desktop.
Apple Chief Executive Tim Cook said it marked the beginning of a major new era for a product line powered the company’s rise in the 1980s and its resurgence in the late 1990s.
“Silicon is at the heart of our hardware,” Cook said during a virtual keynote address recorded at the company’s Cupertino, California headquarters for its annual developer conference. “Having a world class silicon design team is a game changer.”
The silicon switch brings the Mac into line with the company’s iPhone and iPads, which already use Apple-designed chips. Cook said that Apple expects the Mac transition to take about two years and that Apple still has some Intel-based computers in its pipeline that it will support for “many years.”
But the move will give software developers for Apple’s largest pool of third-party apps - those built for iPhones and iPads - new access to its laptops and desktop for the first time. Apple software chief Craig Federighi said that for those offerings, “most apps will just work, with no changes from the developer” on the new Macs. He also said the “vast majority” of existing apps for Intel-based machines can be modified to work in “just a few days.”
Intel shares sat 0.5 per cent higher.
Cineplex Inc. (CGX-T) was up 1.4 per cent in early afternoon trading in the wake of announcing on Friday that its board has approved the adoption of a shareholder rights plan agreement with AST Trust Company (Canada) as rights agent.
"The rights plan has been adopted to ensure the fair treatment of all shareholders in connection with any take-over bid for the company," it stated, adding that the move hasn't been adopted in response to any specific takeover bid "or other proposal to acquire control of Cineplex and the company is not aware of any such pending or contemplated proposals."
See also: Cineplex plans new direction after failed Cineworld deal
On the decline
Canopy Growth Corp. (WEED-T) slid 0.8 per cent in the wake of saying it is expecting to face pressure on its gross margins in the coming quarters as it grapples with the COVID-19 pandemic.
The Smiths Falls, Ont.-based cannabis company’s chief financial officer Mike Lee says the company is anticipating gross margins to be drop below 30 per cent during the pandemic, down from Canopy’s 40 per cent target.
He says Canopy’s gross margins are particularly challenged because 50 per cent of its production costs are fixed and the pandemic is causing the company to lose some economies of scale.
Mr. Lee is slowly seeing the industry rebound from the pandemic and says Canopy’s performance in Canada’s recreational market has improved modestly in recent weeks as brick-and-mortar stores reopened.
Despite signs of a rebound, Mr. Lee says Canopy is taking measures to limit spending and is deferring or cancelling any non-binding commitments it can.
Mr. Lee’s remarks came on an investor call Canopy held to discuss the company’s outlook and the future of the global and legal cannabis market, which chief executive David Klein says could grow to be worth $70-billion by 2023.
NFI Group Inc. (NFI-T) slid 1.4 per cent despite saying its U.S. division was named as a “partner of choice” by 12 major transit agencies across America for their successful project awards through the Federal Transit Administration’s (FTA) low or no emission grant program.
“The 2020 low-no program selections, announced earlier this month, resulted in New Flyer’s best-ever showing as an electric bus manufacturing partner of choice,” the company stated. It said the program is administered through a competitive application process, and “exists to support the nation’s transition to the lowest polluting and most energy efficient transit vehicles using advanced propulsion technology, which improves air quality and migrates riders to clean and reliable mobility. Funding can be used to purchase or lease zero-emission and low-emission transit buses, including acquisition, construction, and leasing of required supporting facilities.”
American Airlines Group Inc. (AAL-Q) was lower by over 6.7 per cent after it said on Sunday it plans to raise US$1.5-billion by selling shares and convertible senior notes, to improve the airline’s liquidity as it grapples with travel restrictions caused by the coronavirus.
The company expects to use a portion of the net proceeds from the offerings for general corporate purposes and to enhance its liquidity position, the airline said in a statement.
The stock and notes offerings include a 30-day option for the underwriters to purchase up to US$112.5-million of additional common shares and up to US$112.5-million of additional notes respectively, the company said.
The airline said it also intends to enter into a new US$500-million term loan facility due 2024.
Tyson Foods Inc. (TSN-N) slid 2.9 per cent after China’s customs authority said on Sunday it had suspended imports of poultry products from a plant owned by the U.S.-based meat processor that has been hit by the novel coronavirus.
The General Administration of Customs said on its website it had decided on the suspension after the company confirmed it had bat the plant, which carries the registration number of P5842.
The plant is located in Springdale, Arizona, according to a customs file of registered exporters.
China also suspended pork products from German pork processor Toennies last week following a coronavirus outbreak among hundreds of its workers.
Gilead Sciences Inc. (GILD-Q) was down 1.7 per cent despite saying it expects supply of its potential COVID-19 drug remdesivir to exceed two million courses by year-end, more than double its previous target of 1 million.
The company also said it planned to start trials of an easier-to-use inhaled version of the antiviral drug, currently administered only intravenously, by August.
Remdesivir is at the forefront in the fight against the virus after the drug helped shorten hospital recovery times in a clinical trial. But producing and supplying billions of doses remain major concerns as the fast-spreading respiratory illness overwhelms healthcare systems around the world.
“We will continue to collaborate globally to ensure sufficient worldwide supply,” Gilead Chief Executive Officer Daniel O’Day said in a statement.
With files from Brenda Bouw, staff and wires
David Leeder