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A survey of North American equities heading in both directions

On the rise

Toronto-based Bragg Gaming Group Inc. (BRAG-T) rose over 2 per cent with the premarket announcement of the formation of a special committee to review strategic alternatives.

The iGaming platform provider said it will consider “the sale of the Company or of its assets, a merger, financing, further acquisitions, or other strategic alternatives.”

“No timetable to complete the strategic review process has been established, nor have any decisions been made relating to strategic alternatives at this time. There can be no assurances that any transaction will be completed,” it added.

The company also announced its fourth-quarter 2023 results, which included a 1.4-per-cent decline in revenue year-over-year and drop of 23.7 per cent in EBITDA. It is now projecting 2024 revenue to rise 9.1 per cent and adjusted EBITDA to gain 21.7 per cent.

Dell Technologies (DELL-N) increased 1.6 per cent after it said in a filing on Monday it reduced its workforce as part of a broader initiative to cut costs that included limiting external hiring and employee reorganizations.

As of Feb. 2, 2024, it had nearly 120,000 employees, down from about 126,000 a year earlier.

The layoffs come after sluggish demand for its personal computers for nearly two years partly contributed to a 11-per-cent drop in revenue in fourth-quarter earnings posted last month.

Dell expects net revenue in its client solutions group (CSG) - home to PCs - to grow for the entire year, it said on Monday. The segment’s revenue had fallen 12 per cent in the fourth quarter.

While Dell cautioned against near-term challenges, the company expects demand to improve and pricing environment to be more competitive in FY 2025.

However, the company expects input costs to rise and added there is likely to be “continued reduction of our other businesses’ net revenue as a result of the change in our commercial relationship with VMware.”

Dell bought back shares tied to its interest in software maker VMware, paving the way for it to return to the market in 2018. Chipmaker Broadcom (AVGO-Q) closed its US$69-billion acquisition of VMware last year.

Last year, Dell slashed 6,650 jobs, when it braced for a potential recession and demand for personal computers dwindled.

Doughnut chain Krispy Kreme (DNUT-Q) soared over 39 per cent after announcing an expansion of its national partnership with McDonald’s (MCD-N) to provide fresh doughnuts daily at restaurants across the country

The phased market roll-out to begin in the second half of 2024 with nationwide availability expected by the end of 2026, the companies said

“This partnership is an exciting next step in that journey and a chance to unlock new business opportunities in the breakfast category and throughout the day,” said Tariq Hassan, McDonald’s USA’s marketing chief.

In 2023, Krispy Kreme stock rose nearly 46 per cent and McDonald’s gained about 13 per cent.

U.S.-listed shares of Israeli defence electronics company Elbit Systems (ESLT-Q) closed flat on the expectation for further sales gains this year after reporting fourth-quarter revenue boosted by higher ammunition sales to Israel for its war against Hamas militants.

Though quarterly earnings slipped by 8 per cent year on year, hit by one-off charges related to a discontinued project, revenue rose to US$1.6-billion from US$1.5-billion.

Finance chief Joseph Gaspar said Elbit had to change priorities after the conflict started in early October, increasing supplies to the Israeli military while asking international customers for flexibility on delivery schedules given the higher local demand.

One of Israel’s biggest defence companies, Elbit still makes 80 per cent of its sales outside its home market and said its order backlog rose to US$17.8-billion last year, from US$15.1-billion in 2022.

The company supplies hundreds of products to Israel’s Defence Ministry, including unmanned aerial vehicles (UAVs), artillery, munitions and electronic warfare systems.

Its workforce expanded by 1,000 in 2023 and the company expects to hire 2,000 more employees in 2024.

For all of 2023, revenue rose 8 per cent to US$6-billion, while diluted EPS ex-one offs rose to US$6.70-from US$6.27 in 2022.

Visa (V-N) and MasterCard (MA-N) saw narrow gains after they announced a settlement with U.S. merchants related to swipe fees, a development that could potentially save consumers tens of billions of dollars.

Swipe fees are paid to Visa, Mastercard and other credit card companies in exchange for enabling transactions. Merchants ultimately pass on those fees to consumers who use credit or debit cards.

According to the settlement announced Tuesday, Visa and Mastercard will cap the credit interchange fees into 2030, and the companies must negotiate the fees with merchant buying groups.

The settlement stems from a 2005 lawsuit which alleged that merchants paid excessive fees to accept Visa and Mastercard credit cards, and that Visa and Mastercard and their member banks acted in violation of antitrust laws.

In 2018 Visa and Mastercard agreed to pay US$6.2-billion as part of the long-running suit filed by a group of 19 merchants. But the lawsuit then had two pieces that need to be resolved: a dispute over the rules Visa and Mastercard impose to accept their cards, and the merchants who chose not to participate in the settlement.

Visa said Tuesday that more than 90 per cent of the merchants in Tuesday’s settlement are small businesses.

Shares of Tesla (TSLA-Q) rose 2.9 per cent on Tuesday after CEO Elon Musk said the electric carmaker will offer U.S. customers a free trial of its driver-assist technology for a month.

Mr. Musk has long touted the Full Self-Driving (FSD) technology as a potential cash cow for the company, but has failed to keep his promise of a fully autonomous driving experience, amid stiff regulatory and legal scrutiny of Tesla’s safety and marketing.

“All U.S. cars that are capable of FSD will be enabled for a one-month trial this week,” Mr. Musk said in a post on social media platform X.

According to two emails, he has also told employees to offer new buyers and owners of serviced vehicles demonstrations of FSD.

Slower-than-expected demand for electric vehicles and mounting competition in China is hurting Tesla’s sales and margins, forcing the company to provide incentives and discounts to boost deliveries.

Tesla has cut prices to boost sales and grab a larger market share, in the hopes of selling its high-margin autonomous technology products to a large base of customers in the future.

“(Free trials) could be a step in the right direction for people beginning to adopt the technology. Maybe this will entice drivers to purchase full self-driving for $12,000 at some point,” said Ken Mahoney, CEO of Mahoney Asset Management.

On the decline

Luxury parka maker Canada Goose Holdings Inc. (GOOS-T) fell 6.7 per cent after it said it would be reducing about 17 per cent of its corporate roles, as the luxury parka maker looks to rein in costs amid weaker consumer spending.

As of April 2, 2023, 915 employees worked at Canada Goose’s corporate head offices, bringing the layoffs to about 156 jobs.

“Today, we are realigning our teams to ensure that corporate resources are fit for purpose to fuel our next phase of growth across geographies, categories, and channels,” CEO Dani Reiss in said a statement.

The company also said Carrie Baker, president of brand and commercial, would expand her role to oversee design.

In February, the retailer had warned that its market in China was not immune to the soft-macro environment, as customers cut back on excessive spending, a trend the company has also seen in the United States. (

Shares of Enbridge Inc. (ENB-T) dipped 0.8 per cent after it said on Tuesday it would form a venture with I Squared Capital and pipeline firms WhiteWater and MPLX to connect Permian supplies to the U.S. Gulf Coast to tap into strong LNG demand for exports.

Enbridge will have a 19-per-cent stake, WhiteWater and I Squared a combined 50.6-per-cent stake while MPLX will hold 30.4 per cent in the venture. The deal is expected to close in second quarter.

U.S. was the largest exporter of LNG in 2023 with several new export facilities expected to come online by the end of the decade.

The JV would include 100-per-cent interests in Enbridge’s wholly-owned Rio Bravo Pipeline, which connects to NextDecade’s Rio Grande LNG project in Brownsville, Texas, and the Whistler pipeline, which transports natural gas from the Permian to nearly the starting point of the Rio Bravo pipeline.

It will also have a 70-per-cent interest in the proposed ADCC pipeline that would connect to Cheniere Energy’s Corpus Christi LNG export facility and a 50-per-cent interest in the Waha Gas storage.

Enbridge will fund the first US$150-million of the post-closing capital to complete the Rio Bravo project. It will also provide US$350-million in cash to the venture.

The Permian is largest U.S. oil shale patch and Enbridge has disclosed plans to expand its capacity in the basin.

United Parcel Service (UPS-N) forecast better-than-expected 2026 total revenue on Tuesday, as the world’s largest parcel delivery company works to aggressively cut costs to offset a post-pandemic shipping slowdown due to lower e-commerce demand.

Shares of the company dropped 8.2 per cent after UPS also said it expects total savings of US$3-billion by the end of 2028. Earlier this year, it had forecast 2024 revenue below Wall Street’s target amid weak demand from its retail, manufacturing and high tech customers.

“After coming off a difficult market in 2023, the small package industry (e-commerce deliveries) is poised to return to growth in 2024 and beyond,” UPS CEO Carol Tomé said on Tuesday.

The company expects 2026 revenue between US$108-billion and US$114-billion, above LSEG estimates of US$102.12-billion.

The delivery firm, seen as a bellwether of the global economy, said in January it planned to cut US$1-billion in costs this year and did not expect business conditions to improve until the second half of 2024.

UPS has been cutting jobs, parking planes and leaning on package tracking and other technology to help offset pressures from tepid demand and labor costs.

The company will share details of its strategic growth and productivity initiatives, as well as discuss its three-year financial targets and cost cut plans at its investor and analyst conference later in the day.

Atlanta-based UPS said it expects capital spending from 2024 to 2026 to be about 5.5 per cent of total revenue.

Alibaba Group (BABA-N) was flat after it said on Tuesday it was offering to buy the 36 per cent of Cainiao it does not already own for up to US$3.75-billion, abandoning plans for an initial public offering (IPO) of the logistics business in Hong Kong.

In the Chinese e-commerce giant’s latest u-turn of its restructuring plan, Alibaba, which holds a stake of around 64 per cent in Cainiao, said it was offering to acquire the remaining stock.

“Given the strategic importance of Cainiao to Alibaba and the significant long-term opportunity we see in building out a global logistics network, we believe this is an appropriate time to double down,” said Alibaba Group Chairman Joe Tsai.

Tsai in a recent earnings call said all Alibaba’s planned IPOs, including Cainiao’s “were subject to market conditions.”

“Market conditions currently are just not in a state where we believe we can really truly reflect the true intrinsic value of these businesses,” he said at the time.

In a statement, Alibaba said on Tuesday that it is offering minority shareholders of Cainiao an opportunity to sell all the outstanding shares for 62 US cents per share.

With files from staff and wires

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 22/05/24 4:00pm EDT.

SymbolName% changeLast
Alibaba Group Holding ADR
Bragg Gaming Group Inc
Canada Goose Holdings Inc
Dell Technologies Inc
Enbridge Inc
Elbit Systems Ltd
Krispy Kreme Inc
Mastercard Inc
McDonald's Corp
Tesla Inc
United Parcel Service
Visa Inc

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