A roundup of some of the North American equities making moves in both directions today
On the rise
The electric car maker intends to raise prices of imported Model 3 vehicles with longer range and those with performance function, which are currently priced at 439,900 yuan (US$62,495.56) and 509,900 yuan, respectively.
The move comes as Tesla, which is building a car plant in Shanghai, aims to deliver China-made Model 3 sedans, which are priced at 355,800 yuan, to customers before Jan. 25 next year.
It was unclear by how much Tesla plans to increase the China prices. The sources declined to be named as they are not authorized to speak to media.
CannTrust Holdings Inc. (TRST-T) reversed early losses and rose 2.8 per cent despite announcing it received written notification on Dec. 9 from the New York Stock Exchange that it’s no longer in compliance with the exchange’s continued listing standard rules.
The trading price of the company’s common shares has fallen below the NYSE’s share price rule of being at least US$1 per share over a consecutive 30 trading-day period.
CannTrust said it has six months to regain compliance and that its common shares will continue to be listed and trade on the NYSE as usual.
The company said it plans to invest between $1.3-billion and $1.5-billion, nearly 22 per cent higher compared to the mid-point of 2019 forecast.
“This budget positions us well to generate adjusted funds flow of more than $3-billion in 2020 under our price assumptions,” said Chief Executive Office Alex Pourbaix.
Higher spending is not a popular choice for shareholders, who prefer companies rather return cash to them. Investors want capital discipline, cleaner balance sheets and better management of cash flow from companies as oil prices remain volatile amid global trade tensions.
On the decline
Correvio Pharma Corp. (CORV-T) plummeted 64.7 per cent after revealing Wednesday it intends to explore options including putting itself up for sale, a day after a panel of experts advising the U.S. health regulator voted against approving its potential blockbuster heart drug.
The Canadian drugmaker is also taking steps to reduce operating costs in North America and has set up a transaction committee within its board of directors.
In response to the decision, a pair of equity analysts on the Street downgraded Correvio shares before the bell.
Hudson’s Bay Co. (HBC-T) was down 1.3 per cent after proxy adviser Glass Lewis & Co. said shareholders should not wait for a higher bid from private equity fund Catalyst Capital Group Inc. and should support HBC executive chairman Richard Baker’s $1.1-billion privatization bid.
Catalyst, which is led by financier Newton Glassman, has proposed to pay $11 per share for HBC. That is higher than Mr. Baker’s bid of $10.30 per share.
But the proxy adviser questioned whether Catalyst had “obtained sufficient funding commitments” and said the private equity company had not shown that it would be able to secure support from Mr. Baker’s group of shareholders that control 57 per cent of HBC’s stock.
- Rachelle Younglai
Home Capital Group Inc. (HCG-T) was 1.6 per cent lower after it announced a strategic review of its consumer retail loan portfolio determined its point-of-sale retail lending business is considered non-core.
It said a gross loan balances of approximately $84-million will now be treated as assets held for sale for accounting purposes.
“The assets and income associated with the point-of-sale business are not material to the Company’s financial results. Home Capital will continue to operate the point-of-sale business until a suitable transaction can be concluded,” the company said.
After the bell on Tuesday, the recreational vehicle maker announced Beaudier and Bain Capital have entered into an agreement to complete a secondary offering.
Desjardins Securities analyst Benoit Poirier said: “From a trading standpoint, we view the announcement as a slight negative for the share price although it should increase the stock’s liquidity.”
Chevron Corp. (CVX-N) declined 1 per cent after revealing it plans to take a fourth-quarter writedown of up to US$11-billion and wants to sell off its stake in a proposed liquefied natural gas project in British Columbia.
More than half of the non-cash, after-tax impairment charge stems from California-based Chevron’s Appalachia shale gas assets, notably in Pennsylvania, West Virginia and Ohio. Other assets in the quarterly charge include the Chevron-operated deepwater Big Foot oil project in the Gulf of Mexico.
The massive writedown underscores the challenges faced by the energy industry as producers struggle to cope with low oil and gas prices.
Home Depot Inc. (HD-N) slipped 1.9 per cent on Wednesday as it forecast tepid sales growth for next year, pointing to more weakness at the No.1 U.S. home improvement chain, just weeks after it cut its outlook for the 2019 fiscal year due to disappointment over an online overhaul.
The company has been investing heavily in its e-commerce business by adding automated lockers in its stores to keep shoppers from moving online and has developed a more user-friendly website under its “One Home Depot” program.
Home Depot is also ramping up its supply chain to speed up delivery as it wrestles with competition from smaller rival Lowe’s Cos Inc, which has been gaining market share in a tough retail environment.
Retailer American Eagle Outfitters Inc. (AEO-N) was down 6.8 per cent after it forecast holiday-quarter profit and comparable sales below market estimates on Wednesday, as weaker demand pressures the retailer into offering higher discounts on its flagship AE brand.
The company has been heavily discounting its merchandise to entice shoppers during the all-important holiday season, a key period for retailers, amid intense competition from rival retailers and off-price outlets.
“Softer demand in certain AE apparel categories led to higher markdowns and has persisted into the fourth quarter,” Chief Executive Officer Jay Schottenstein said.
With files from staff and wires