A roundup of some of the North American equities making moves in both directions today
On the rise
Barrick Gold Corp. (ABX-T) was up 1.6 per cent in mid-afternoon trading as gold prices jumped and after the operator of its Porgera gold mine in Papua New Guinea said it will lay off most staff, a signal that an impasse with the government over ownership is unlikely to be resolved swiftly.
Barrick, the world’s second-biggest gold miner, was refused an extension of its expired lease on the mine in April, with the government citing unrest and pollution concerns.
It stopped production and put the mine in care and maintenance mode while challenging the lease decision in court, but on Wednesday flagged further job cuts and said 2,650 Papua New Guinea nationals would be retrenched by the end of July.
“The government had repeatedly refused to enter into meaningful discussions about the issue,” Barrick Niugini Ltd, which operates the mine as a joint venture between Barrick and China’s Zijin Mining Group Ltd, said in a statement.
“The fact that the mine is not operating and therefore not producing revenue had created a financially untenable situation.”
It said staff it had kept on in the hope of resolving the dispute would be cut at a cost of $52 million.
GFL Environmental Inc. (GFL-T) was up almost 2.5 per cent on the premarket announcement that it has entered into a definitive agreement to purchase a portfolio of vertically integrated solid waste collection, transfer, recycling and disposal assets for an aggregate purchase price of US$835-million.
The assets include 32 collection operations, 36 transfer stations and 18 landfills supported by 380 collection vehicles across 10 U.S. states.
The assets are expected to generate annualized revenue of approximately US$345- million.
“The acquired assets are expected to support GFL’s continued organic growth extending its reach into new and adjacent markets and forming a base to pursue synergistic tuck-in acquisitions. GFL expects that the Acquisition will significantly expand its U.S. footprint while creating an opportunity to realize meaningful synergies and earnings accretion,” the company said.
Dell Technologies Inc. (DELL-N) jumped 7.8 per cent after Wall Street Journal reported it’s considering spinning off its roughly US$50-billion stake in cloud computing software maker VMware Inc. (VMW-N).
Dell is also exploring taking other steps that could include buying the rest of VMWare, the Journal reported, citing people familiar with the matter.
Dell, which is the controlling stakeholder of VMware, did not immediately respond to a Reuters request for comment.
Shares of VMware were 3 per cent higher.
On the decline
Indigo Books & Music Inc. (IDG-T) slid 2.9 per cent after chief executive Heather Reisman said it expects at least 10 to 12 months of a “damaging set of conditions” from the COVID-19 pandemic, the day after the company reported a fourth-quarter loss of $171.3 million.
“This pandemic is, to be sure, a seismic, once-in-a-lifetime event,” Ms. Reisman told a conference call with analysts Wednesday.
“For Indigo, like so many others, the impact has been and will continue to be significant.”
She said governments deemed the Toronto-based retailer as non-essential so it was forced to close all 196 of its stores two weeks before the close of its financial year, which ended March 28.
Prior to the closures, the company expected to close its financial year with an essentially flat figure for adjusted earnings before interest, taxes, depreciation and amortization, she said.
Carnival Corp. (CCL-N) declined 10.7 per cent after ratings agency Standard & Poor’s downgraded its bonds, forecasting continued weak demand for the cruise industry hammered by the COVID-19 pandemic.
Standard & Poor’s cut its rating on the world’s biggest cruise operator’s secured bonds to ‘BB+’ from ‘BBB-’, and its unsecured bonds to ‘BB-’ from ‘BBB-’. Both are now regarded as non-investment grade or junk bonds.
Carnival’s overall issuer credit rating was also lowered to ‘BB-’ from ‘BBB-’. Last month, Moody’s Investors Service also cut the company’s rating to junk status.
Earlier in June, Carnival reported record US$4.4-billion in preliminary quarterly losses after its business was crippled by the health crisis, forcing it to take major write-downs on the disposal of some docked ships.
The company, which in recent weeks fully drew down a US$3-billion credit line and issued US$6.6-billion in bonds and equity, has also been looking for further waivers on debt repayments due next year, without which it could breach some loan conditions.
Tesla Inc. (TSLA-Q) dipped 3.8 per cent in the wake of The U.S. National Highway Traffic Safety Administration (NHTSA) saying Tuesday it had opened an investigation into 63,000 Model S cars after reports of media control unit failures that led to loss of the use of a touchscreen.
The auto safety agency said the probe, known as a preliminary evaluation, covers 2012-2015 model year vehicles and comes after it received 11 complaints alleging failures.
The complaints said the media control unit failures allegedly fails prematurely due to memory wear-out. NHTSA said Tesla used the same unit in 159,000 2012-2018 Model S and 2016-2018 Model X vehicles built by Tesla through early-2018.
The agency said a complete unit failure results in loss of audible and visual touchscreen features, such as infotainment, navigation, and web browsing and loss of rear camera image display when in reverse gear.
GNC Holdings Inc. (GNC-N), the vitamin and herbal supplement retailer, lost over 27 per cent after it filed for bankruptcy, with plans to close at least 800 to 1,200 locations and possibly sell itself.
The 85-year-old company filed for Chapter 11 protection late Tuesday night in the U.S. bankruptcy court in Wilmington, Delaware.
GNC had been trying to reduce its nearly $900 million debt load amid falling sales at its brick-and-mortar stores when the coronavirus pandemic forced thousands of locations to close temporarily, cutting off a major revenue source. About 2,100 of its 11,000 employees remain furloughed.
The Pittsburgh-based company, whose name is an acronym for General Nutrition Centers, plans a “dual-path” restructuring where it would either be sold as a going concern, or improve its balance sheet by shedding more than US$300-million of debt.
Web hosting company GoDaddy Inc. (GDDY-N) fell 8.9 per cent on Wednesday after it announced a restructuring plan that will affect about 12 per cent of its total workforce, or about 814 employees, due to the fallout from the coronavirus crisis.
The world’s largest domain registrar said the employees will either be let go or be moved to other roles and locations and will add about US$15-million in pre-tax charges.
GoDaddy said it has seen a dip in demand for higher-priced, do-it-for-you services such as GoDaddy Social.
The company also expects to exceed its second quarter revenue by about 1 per cent from its initial guidance of US$790-million citing high demand for its domains and websites.
With files from staff and wires