Market movers: Stocks that saw action on Wednesday - and why

A roundup of some of the North American equities making moves in both directions

On the rise

Cannabis stocks soared on Wednesday on the possibility of U.S. Democrats gaining control of the Senate.

Democratic challenger Raphael Warnock won a hotly contested Senate race in Georgia over Republican incumbent Kelly Loeffler, while Democrat Jon Ossoff held a narrow lead over incumbent Republican David Perdue in the other race.

Pot stocks have rallied since Joe Biden’s victory in the U.S. presidential elections in November and higher demand for pot during the coronavirus-led lockdowns.

Vice President-elect Kamal Harris’ has promised pot decriminalization, which would remove it from the classified substances list. But with republicans gaining control of the senate in November elections, the passage of acts to decriminalize it, had looked bleak.

“Given Democrat President-elect Joe Biden will take office later this month, and the House remains controlled by the Democrats – a Democratic sweep could clear the way for more progressive cannabis legislation to be passed,” said Aaron Grey of Alliance Global Partners in a note.

Canopy Growth Corp. (WEED-T), Aphria Inc. (APHA-T), Cronos Group Inc. (CRON-T) were among the companies seeing significant gains in the wake of Tuesday’s run-off votes.

See also: Markets shift to price in chance of Democrat Senate wins

Invesco Solar ETF (TAN-A) gained on expectations that clean energy companies will benefit under a Democrat-control Congress.

Others seeing gains included Guelph, Ont.-based Canadian Solar Inc. (CSIQ-Q), Solaredge Technologies Inc. (SEDG-Q) and First Solar Inc. (FSLR-Q).

See also: How the Georgia Senate runoffs could rattle U.S. stocks

Toronto-based Score Media and Gaming Inc. (SCR-T), Draftkings Inc. (DKNG-Q) and Gan Ltd. (GAN-Q), an online gambling software provider, were among the stocks rising after New York Governor Andrew Cuomo said he wants to follow neighboring New Jersey in legalizing mobile sports betting and recreational marijuana to help his state regain its financial footing.

After years of resisting the legalization of online sports betting, the governor will push for the lucrative measure in his State of the State address next week

“New York has the potential to be the largest sports wagering market in the United States and by legalizing online sports betting we aim to keep millions of dollars of tax revenue here at home, which will only strengthen our ability to rebuild from the COVID-19 crisis,” Mr. Cuomo said in a statement.

Tesla Inc. (TSLA-Q) continued its meteoric rise after an equity analyst at Morgan Stanley established a new Street-high target price for its shares after the bell on Tuesday.

Adam Jonas hiked his target to US$810 from US$540, reiterating an “overweight” recommendation. The current average target among analysts covering the stock is US$438.83, according to Refinitiv data.

He said Tesla remains the best positioned among electric and autonomous vehicles companies and its business model can unlock recurring mobility services revenue faster and more profitably than its competition.

Montreal-based Xebec Adsorption Inc. (XBC-X) rose after announcing before the bell it has received final approval to list its common shares on the TSX.

The air purification equipment manufacturing company will commence trading at the market open on Thursday.

Vancouver-based marijuana producer Zenabis Global Inc. (ZENA-T) was up after announcing it has entered into exclusive discussions for “a potential merger transaction with another significant licenced cannabis producer.”

“There can be no assurance that these discussions will result in a binding agreement or the completion of a transaction. No further details regarding such discussions, including the identity of the counterparty, will be disclosed at this time,” it said.

U.S. drug wholesaler AmerisourceBergen Corp. (ABC-N) rose after it said on Wednesday it would buy Walgreens Boots Alliance’s (WBA-Q) drug distribution business for US$6.5-billion to expand in Europe.

AmerisourceBergen will pay Walgreens US$6.27-billion in cash and deliver 2 million shares of AmerisourceBergen common stock at closing of the transaction.

Walgreens’ unit, Alliance Healthcare is one of the largest drug distributors in Europe. Reuters reported in May that AmerisourceBergen had approached Walgreens to explore a deal for the unit.

With the deal, Walgreens Boots Alliance will be able to increase focus on its core retail pharmacy businesses, which has seen a hit in sales due to the COVID-19 pandemic.

With a 30-per-cent stake, Walgreens is the largest shareholder of AmerisourceBergen.

U.S. jeweler Tiffany & Co. (TIF-N) was flat after it said it reported record sales for the 2020 holiday period as consumers stuck at home shopped more online and shoppers in China spent more on jewelry.

The company, which will soon be bought by France’s LVMH , said its overall preliminary net sales rose about 2 per cent for the period Nov. 1 through Dec. 31, compared with a year earlier, with e-commerce sales surging more than 80 per cent during the period.

The 2020 holiday season was unusual as the virus outbreak upended shopping patterns, with more consumers avoiding malls and retail stores and opting to shop online.

Tiffany, known for its engagement rings and robin’s egg blue boxes, said net sales in the Asia-Pacific region soared 20 per cent, with mainland China posting a growth of over 50 per cent.

“During this period, we saw the Chinese Mainland market continue to drive our overall sales growth,” Chief Executive Officer Alessandro Bogliolo said.

However, net sales in Americas and Europe declined as it lost out on some crucial in-store sales in certain markets.

Health insurer UnitedHealth Group Inc. (UNH-N) rose in the wake of announced on Wednesday it has agreed to buy Change Healthcare Inc. (CHNG-Q) for US$7.84-billion in cash to boost its healthcare technology services business under the Optum division.

UnitedHealth will pay US$25.75 per Change Healthcare share, a premium of 41.2 per cent to Tuesday’s closing price. Shares of Change were trading near the offer price at US$24.90.

The acquisition of Change, which collaborates with payers and providers to simplify billing and payment processes among other things, is expected to add to UnitedHealth’s adjusted earnings per share by about 50 US cents in 2022.

Optum offers data, software and services to insurance firms, physicians, hospitals and pharmaceutical companies. The unit accounted for more than half of UnitedHealth’s total revenue of US$65.1-billion in the quarter ended Sept. 30.

“Together we will help streamline and inform the vital clinical, administrative and payment processes on which health care providers and payers depend to serve patients,” Andrew Witty, president of UnitedHealth and chief executive officer of Optum, said in a statement on Wednesday.

With files from staff and wires