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A look at North American equities heading in both directions

On the rise

Shares of BlackBerry Ltd. (BB-T) were higher by over 5 per cent after it said on Tuesday it would sell patents, primarily related to its mobile devices, for up to US$900-million after the Canadian software company scrapped an earlier deal with Catapult IP Innovations Inc.

Malikie Innovations Ltd will buy the patents and pay US$170-million in cash on deal closing, and another US$30-million three years later. BlackBerry will also get annual cash royalties from the profits generated from the patents, relating to its messaging and wireless networking among others.

Malikie is a newly formed unit of intellectual property monetization firm Key Patent Innovations Ltd.

Blackberry said last year it was exploring other options to sell its patents as the planned deal with Catapult IP Innovations Inc was taking longer than usual to close, leading to a loss in exclusivity.

“Catapult was unable to secure financing that would have enabled it to complete the previously announced transaction on amended terms that were acceptable to BlackBerry,” the Canadian company said in a statement.

Once known for its phones with a tiny QWERTY physical keyboard and the BBM instant messaging service, BlackBerry’s core businesses today are cybersecurity and software used by automakers.

Last year, the company pulled the plug on service for its smartphones, a culmination of years of market share loss to Apple’s iPhones and rival Android devices.

Canadian asset manager Brookfield Asset Management Ltd. (BAM-T) was up 1.7 per cent after announcing a deal to acquire the 50-per-cent stake in Spanish renewable energy company X-elio it doesn’t already owned from U.S.-based buyout fund KKR.

KKR first invested in X-elio in 2015 and Brookfield did so in 2019, they said in a joint statement.

A Spanish newspaper last month reported that KKR was considering selling its stake in X-elio and a deal would value the company at 2.5 billion euros (US$2.68-billion).

X-elio operates and builds renewable power infrastructure mainly in Spain, the United States and Latin America. It currently develops and operates renewable power plants with a combined capacity of 3 gigawatts.

With its sunny plains, fast-flowing rivers and windy hillsides, Spain is attracting many investors for renewable energy projects.

Canadian Solar Inc. (CSIQ-Q) jumped over 15 per cent with the premarket release of stronger-than-anticipated fourth-quarter results.

Before the bell, the Guelph, Ont.-based clean energy firm reported revenue of US$1.97-billion, up 29 per cent year-over-year and topping the Street’s forecast of US$1.93-billion. Its net income almost tripled to US$77.8-million from US$26-million during the same period a year ago.

For the full year, it established new records for revenue (US$7.47-billion) and net income (US$240-million) as solar module shipments soared by 45 per cent.

For 2023, it sees total revenue in the range of US$8.5-US$9.5-billion, which is narrowly below the consensus estimate of US$9.71-billion.

Vancouver-based WELL Health Technologies Corp. (WELL-T) soared 7.8 per cent with the release of record revenue in the fourth quarter and a “strong” growth outlook for 2023.

Before the bell, it reported revenue of $156.5-million, up 35 per cent year-over-year and above the Street’s expectation of $153.8-million, resulting it a full-year gain of 88 per cent (to $569.1-million). Adjusted EBITDA was up 73 per cent from fiscal 2021.

It provided 2023 guidance for annual revenue between $665-million and $685-million, also ahead of the consensus forecast ($652.5-million), and expects EBITDA to increase by more than 10 per cent over 2022 levels “as the company invests in sustained profitable growth.”

“WELL is expecting to have strong performance in 2023 across all its business units and for the entire Company as a whole. Despite the current geo-political, inflationary, and turbulent economic environment, the Company does not foresee any material influences or challenges that would impair its ability to deliver solid results in 2023. Many of the key variables inherent in the execution of WELL’s business are firmly in its own grasp and not dependent on outside factors,” it said.

On the decline

Shares of First Majestic Silver Corp. (FR-T) dropped 22 per cent after announcing the suspension of all mining activities at Jerritt Canyon, which accounted for about 21 per cent of its 2022 revenue, effective immediately.

‘Over the past 22 months since the acquisition of the Jerritt Canyon Gold Mine in Nevada, the Company has been focused on increasing underground mining rates in order to sustainably feed the processing plant at a minimum of 3,000 tpd in order to generate free cash flow as our plans suggested,” it said in a press release. “Despite these efforts, mining rates have remained below this threshold and cash costs per ounce have remained higher than anticipated primarily due to ongoing challenges such as contractor inefficiencies and high costs, inflationary cost pressures, lower than expected head grades and multiple extreme weather events affecting northern Nevada, which have compounded conditions and caused material headwinds for the operation.”

First Majestic said it is reducing its workforce at the facility to cut overall costs and will continue exploring both near-mine and prospective regional greenfield targets to grow its resources.

In a research note, TD Cowen analyst Craig Hutchison said: “With the stock trading significantly lower after hours and pre-market, this will bring our total return in line with our HOLD recommendation. Although it is disappointing that the company was unable to turn around the Jerritt Canyon operation amidst the strong gold-price environment, the decision to suspend mining activities makes sense to preserve the company’s balance sheet.”

Ritchie Bros Auctioneers Inc. (RBA-T) closed flat after it said late Monday it had completed the acquisition of U.S. auto retailer IAA Inc, weeks after two proxy advisory firms urged shareholders to reject the US$7-billion deal.

The company, which auctions and sells used heavy industrial equipment, last week saw its shareholders vote in favor of the acquisition despite the pushback from Institutional Shareholder Services and Glass Lewis.

The proxy advisory firms on March 6 recommended that shareholders reject the deal due to potential risks including a lag in IAA’s performance and a drop in stock price since the bid was announced in November.

Under terms of the transaction, IAA shareholders would get US$12.80 per share in cash and 0.5252 common shares of Ritchie Bros for each share of IAA common stock they own.

Ritchie Bros in January sweetened the cash component of its buyout offer for IAA Inc by 28 per cent, valuing the U.S. auto retailer at US$5.94-billion, and also secured the backing of a key IAA shareholder which had questioned the initial offer.

With the deal having closed, Ritchie Bros shareholders hold 62.8 per cent of the combined company and IAA stockholders own the rest.

IAA’s common stock ceased trading on the New York Stock Exchange under the ticker symbol “IAA” as of the close of trading on March 20.

With files from staff and wires

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