A survey of North American equities heading in both directions
On the rise
Stantec Inc. (STN-T) rose 1.8 per cent after announcing it has acquired Morrison Hershfield, a Markham-based engineering firm with 22 offices across North America, boosting its Canadian workforce by 1,150 employees and doubling its transportation presence in Ontario.
The companies did not disclose the financial terms of the deal. The acquisition is subject to various court and regulatory approvals.
The deal marks the latest in a string of acquisitions for Stantec, following its long-term strategy of bolt-on buys to expand its employee base and expertise. It also follows a broader trend of consolidation within the engineering and construction industry, as large global firms fight to increase their scale and jump into new markets.
Morrison Hershfield is an employee-owned engineering and management consulting firm founded in 1946, operating in Canada, the United States and India. With roots in the post-war building boom, the firm has grown to offer a range of services in the transport, telecommunications and environmental sectors, with frequent work on highways, tunnels and bridges.
The acquisition will expand Stantec’s presence in most Canadian markets, increasing its domestic employee count by approximately 10 per cent, while further strengthening its workforce in the U.S., the company said in a release Tuesday morning. Stantec employs about 28,000 people worldwide.
- Irene Galea
Fiera Capital Corp. (FSZ-T) increased 2.6 per cent with the hiring of veteran money manager Maxime Ménard as chief executive officer of Fiera Canada.
Mr. Ménard’s appointment, which is effective immediately, comes almost exactly one year after Jean-Guy Desjardins made a surprise return to the CEO role of the company he founded in 2003. Mr. Desjardins first relinquished the position in early 2022 to Jean-Philippe Lemay – his hand-picked successor who had spent a decade being groomed for the role – only to retake the job in January, 2023, after Mr. Lemay left Feira under circumstances that remain unclear.
While Mr. Desjardins, 79, will remain global CEO and chair of the Montreal-based company’s board of directors, he said in an interview that Mr. Ménard “will obviously be one of my potential successors.” The Canadian division Mr. Ménard has been tapped to lead represents roughly 65 per cent of Fiera’s business.
“The board has been asking me over the last year for a succession plan and it is very clear that Maxime is a serious, high-profile candidate as one of the potential candidates within the organization to eventually take over the global CEO position,” Mr. Desjardins said.
Juniper Networks (JNPR-N) surged 21.8 per cent on Tuesday after reports Hewlett Packard Enterprise (HPE-N) was nearing a US$13-billion deal for the networking gear maker to capitalize on the boom in artificial intelligence.
A deal could be announced as early as this week, a person familiar with the matter told Reuters on Monday.
HPE, grappling with sluggish demand in its traditional server business, is looking to tap into Juniper’s offerings such as network security and AI-enabled enterprise networking operations (AIOps).
Revenue from Mist AI, Juniper’s cloud-based AI platform that helps enterprises streamline operations across wireless and wired networks, has nearly doubled over the “last couple of quarters,” CEO Rami Rahim said in December.
“Taking that Mist secret sauce and expanding it across more and more layers of network is definitely part of the strategy,” he had then said.
The companies have both struggled after the pandemic-induced demand surge ebbed but HPE, with its broader portfolio of products, has been able to navigate the slowdown better than Juniper.
Weak demand from inflation-hit wireless carriers and cable operators, as well as stiff competition from Cisco Systems and Nvidia in the networking space has been a drag on Juniper.
Shares of Sunnyvale, California-based Juniper have declined over 17 per cent through 2022 and 2023, underperforming the Nasdaq Composite index.
Match Group Inc. (MTCH-Q) jumped 3 per cent after the Wall Street Journal reported activist investor Elliott Investment Management has built a roughly US$1-billion stake and plans to push the Tinder dating app owner to take steps to improve its performance.
Elliott also plans to push Match to take steps to boost its languishing stock price, the Journal reported, citing people familiar with the matter. However, it could not learn of Elliott’s specific demands.
“Our team regularly engages with investors, and will continue to work to create great experiences for our users and value for our shareholders”, a Match spokesperson said in a statement to Reuters.
U.S. consumers are wary of spending on discretionary items such as dating app subscriptions due to economic uncertainties, prompting advertisers to keep their spending tight, which impacted Match’s portfolio of dating apps that include Hinge, OKCupid and Plenty of Fish.
Last October, Match forecast fourth-quarter revenue that came in short of market estimates and a month later, its smaller rival Bumble Inc. (BMBL-Q) issued a similar outlook.
The company is currently valued at about US$10.30-billion, following a 12-per-cent drop in its stock price in 2023. The shares have lost about 80 per cent of their value since the highs they hit during the COVID-19 pandemic.
Uber Technologies Inc. (UBER-N) rose and ride-sharing competitor Lyft Inc. (LYFT-Q) fell amid concerns about the U.S. Department of Labor issuing a final rule forcing companies to treat some workers as employees, rather than less expensive independent contractors.
The rule is widely expected to increase labour costs for industries that rely on contract labor or freelancers, such as trucking, manufacturing, healthcare and app-based “gig” services.
Most federal and state labour laws, such as those requiring a minimum wage and overtime pay, apply only to a company’s employees. Studies suggest that employees can cost companies up to 30 per cent more than independent contractors.
The rule will require that workers be considered employees rather than contractors when they are “economically dependent” on a company. It does not go as far as wage laws in California and other states that place even greater limitations on independent contracting.
It replaces a regulation by Republican former President Donald Trump’s administration that had made it easier to classify workers as independent contractors. The new rule is likely to be challenged in court by trade groups and businesses.
A day after closing at a record high, Nvidia Corp. (NVDA-Q) rose another 1.7 per cent in the wake of the world’s most valuable chipmaker unveiling new desktop graphics processors taking advantage of artificial intelligence.
Nvidia’s stock climbed 6.4 per cent on Monday to end at US$522.53, its highest close ever, after the company announced the GeForce RTX 40 SUPER Series of graphics processors, aimed primarily at videogame enthusiasts.
Ahead of the Consumer Electronics Show in Las Vegas, Nvidia also announced other components and software related to AI.
Viewed as the leading supplier of processors used in AI computing, Nvidia’s stock more than tripled in 2023.
Traders exchanged over US$32-billion worth of Nvidia’s shares during Monday’s session, making it the most traded company on Wall Street, according to LSEG data. Nvidia’s stock market value now stands at nearly US$1.3-trillion.
On the decline
Leamington, Ont.-based Tilray Brands Inc. (TLRY-T) was lower by over 9 per cent after it reported a net loss of US$46.2-million in its latest quarter as its revenue rose 34 per cent compared with a year ago.
The cannabis company says the loss amounted to 7 US cents per diluted share for the quarter ended Nov. 30.
The result compared with a loss of US$61.6-million or 11 US cents per diluted share a year earlier.
Net revenue for what was Tilray’s second quarter totalled US$193.8-million, up from US$144.1-million in the same quarter a year earlier.
Tilray chairman and chief executive Irwin Simon says the company grew revenue, enhanced its capital structure and realized operating synergies.
In September 2023, Tilray closed its acquisition of eight beer and beverage brands from Anheuser-Busch including Shock Top, Breckenridge Brewery, Blue Point Brewing Co., 10 Barrel Brewing Co., Redhook Brewery, Widmer Brothers Brewing, Square Mile Cider Co. and HiBall Energy.
Shares of Canopy Growth Corp. (WEED-T) slid 8.8 per cent after announcing a US$30-million private placement of 6.99 million units at US$4.29 each.
The Smiths Falls, Ont.-based company said the offering will “further strengthen” its financial position.
Minto Apartment Real Estate Investment Trust (MI.UN-T) dipped 0.6 per cent with the premarket announcement of the $86-million sale of two properties in Ottawa to the Ottawa Community Housing Corp.
The REIT says the deal for the Tanglewood and Chesterton/Bowhill properties, which consists of 311 suites, is in line with its valuation for the assets. The proceeds will be used to repay a portion of its variable-rate revolving credit facility.
Netflix Inc. (NFLX-Q) dropped 0.6 per cent after an analyst Citigroup downgraded the streaming platform’s shares to “neutral” from “buy” in a research note released late Monday.
“Across 2024 and 2025, the Street has lofty expectations for Netflix,” said Jason Bazinet. “We see three potential risks. First, we believe 2024 revenue estimates may be a tad too high. Second, we see scope for 2025 content investments to exceed Street estimates. Third, we cannot rule-out potential acquisitions. As such, at prevailing levels, we find the risk-reward relatively balanced. Our target remains at $500 per share.”
Mr. Bazinet maintained a target of US$500 per share for Netlfix shares, exceeding the US$479.03 average on the Street.
Unity Software Inc. (U-N) declined after the videogame software provider revealed it is aiming to lay off approximately 25 per cent of its workforce, or 1,800 jobs, in a regulatory filing and internal company memo on Monday.
This is the San Francisco-based company’s largest layoff ever, with completion expected by the end of March, the company said. While Unity is not widely recognized outside the gaming industry, over 1.1 million game creators rely on its software toolkit each month, including the maker of the popular Pokemon Go, Beat Saber and Hearthstone games.
Monday’s deep job cuts will affect all teams, regions and areas of the business, the company told Reuters.
The layoffs come shortly after interim CEO Jim Whitehurst announced a “company reset” in November.
“We are … reducing the number of things we are doing in order to focus on our core business and drive our long-term success and profitability,” Mr. Whitehurst wrote in the memo to all Unity employees on Monday.
While Mr. Whitehurst provided no specifics on structural changes to come, a company spokesperson confirmed there will be additional changes coming. This is the fourth round of layoffs the company has conducted since July 2022.
The layoffs and company reset follow a tumultuous period for Unity.
In September last year, the company tried to impose a new “runtime fee” pricing policy, which charged new fees to its game developers if certain revenue and install thresholds were met. Following a developer revolt and a steep dropoff in share price, the company revamped the new fees.
Following the controversy, then-Unity CEO John Riccitiello retired, and the company appointed former IBM president Whitehurst as interim CEO and president and Sequoia Capital partner Roelof Botha as board chairman.
With files from staff and wires
David Leeder