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

On the rise

North American marijuana companies surged on Wednesday after Amazon (AMZN-Q) confirmed it supports a proposed U.S. legislation to legalize cannabis at the federal level, and said it will drop testing requirements for some of its recruitments.

The e-commerce company’s public policy team will be actively supporting The Marijuana Opportunity Reinvestment and Expungement Act of 2021 (MORE Act), which seeks to legalize marijuana at the federal level, its consumer boss Dave Clark said in a blog post.

Amazon will also no longer screen its job applicants for marijuana use for any positions not regulated by the Department of Transportation, Clark added.

While many U.S. states have legalized marijuana use, employers have so far largely refused to work with the industry as cannabis is still a classified substance at the federal level.

“In the past, like many employers, we’ve disqualified people from working at Amazon if they tested positive for marijuana use,” Clark said. “However, given where state laws are moving across the U.S., we’ve changed course.”

Companies seeing gains following the announcement include: Tilray Inc. (TLRY-Q), Cronos Group Inc. (CRON-T), Aurora Cannabis Inc. (ACB-T) and Canopy Growth Corp. (WEED-T).

Laurentian Bank Financial Group (LB-T) increased on Wednesday after it beat expectations as it reported a second-quarter profit of $53.1-million, up from a profit of $8.9-million a year ago.

The Montreal-based bank says the profit amounted to $1.15 per diluted share, up from 13 cents per diluted share in the same quarter last year.

The improvement came as the bank’s provisions for credit losses fell to $2.4-million in the quarter compared with $54.9-million a year ago when the economy stalled due to the COVID-19 pandemic.

Revenue totalled $249.8-million, up from $240.1-million a year earlier.

On an adjusted basis, Laurentian says it earned $1.23 per diluted share, up from an adjusted profit of 20 cents per diluted share a year ago.

Analysts on average had expected the bank to earn an adjusted profit of 89 cents per share, according to financial data firm Refinitiv.

“The momentum we built in the first quarter of 2021 continued into the second quarter with strong performance in capital markets, lower provision for credit losses and our continued focus on cost discipline,” Laurentian CEO Rania Llewellyn said in a statement.

AMC Entertainment Holdings Inc. (AMC-N) continues its surge, eyeing a record high with its stock trading 11 times analysts’ median target price.

On Tuesday, a hedge fund that helped AMC Entertainment Holdings raise US$230-million quickly sold its stake in the world’s largest cinema chain at a profit, when the “meme stock” soared more than 20 per cent.

The move by Mudrick Capital Management to flip 8.5 million shares of the movie theater chain immediately after buying them in a private placement from the company shows how Wall Street is getting bolder about making a quick buck off a trading frenzy that has helped fuel big rallies in several stocks favored by retail investors.

Easy money from the Federal Reserve has “created an almost video game-like atmosphere in the stock market and investing,” said Michael O’Rourke, chief market strategist at Jones Trading. “There’s money flowing everywhere and this is a great illustration of that.”

On Wednesay, AMC said that it’s launching AMC Investor Connect, an initiative that will put the company in direct communication with its individual shareholders to keep them up to date about important company information and provide them with special offers. AMC’s retail shareholder base has grown to more than 3 million owners over the last several months.

Zoom Video Communications Inc. (ZM-Q) gained ground after it forecast current-quarter revenue above estimates, as increased adoption of hybrid work models by companies is expected to drive steady demand for its video conferencing tools.

Zoom became a household name and investor favorite in the past year, as businesses and schools switched to its services for virtual classes, office meetings and socializing.

But with rapid vaccination efforts and life slowly returning to normal, analysts are skeptical of the sustainability of Zoom’s growth, especially with rivals Microsoft, Cisco and Google snapping at its heels.

“The extent to which Zoom can compete sustainably with the likes of Cisco and Microsoft remains to be seen over the next few quarters as we begin to enter true COVID comparable quarters,” said Joe McCormack, senior analyst at Third Bridge.

However, the San Jose, California-based company assuaged some of those concerns by forecasting current-quarter revenue in the range of US$985-million to US$990-million, above Wall Street’s estimate of US$931.8-million, according to IBES Refinitiv data.

Zoom posted adjusted profit of US$1.32 per share on revenue that nearly tripled to US$956.2-million in the quarter, compared with estimates of a profit of 99 US cents and US$906-million in revenue.

Etsy Inc (ETSY-Q) rose after the company said it would buy Generation-Z focused fashion resale company Depop for US$1.63-billion, seeking to attract younger shoppers and bolster its position in a booming market in vintage or used clothing.

After a pandemic-driven surge in sales over the last year, Etsy, among the world’s best known e-commerce platforms for handmade goods and vintage items, estimates the U.S. second-hand clothing market alone will be worth US$64-billion by 2024.

Chief Executive Officer Josh Silverman said in statement he saw Depop as “the resale home for Gen-Z consumers” and believed there was significant potential to scale up its business as he seeks to offset the return of consumers to more traditional mall and high street shopping over the next year.

London-based Depop, founded in 2011, is known for its vintage and streetwear collections and has more than 26 million users from over 147 countries.

On the decline

Brookfield Infrastructure Partners (BIP.UN-T) dipped after it raised its offer to buy Inter Pipeline Ltd. (IPL-T) to $19.75 per share, or $8.48-billion, from $16.50 per share.

The latest offer comes a day after Pembina Pipeline Corp. (PPL-T) said it would buy Inter Pipeline in an all-stock deal valued at $8.3-billion. Brookfield had previously said it could raise the offer to as much as $18.25 per share.

Brookfield said it is taking the offer directly to Inter Pipeline’s shareholders.

“As the largest shareholder, it is disappointed by the seeming lack of fiduciary responsibility shown by the decision of the IPL Board of Directors to support an inferior proposal by Pembina,” Brookfield said.

The investment firm’s latest offer comprises 74-per-cent cash as compared to zero in the Pembina offer.

Inter on Tuesday reiterated its recommendation, first made in March, that shareholders reject Brookfield’s bid of $16.50 per share, saying the offer significantly undervalued the company.

Indigo Books & Music Inc. (IDG-T) dropped in afternoon trading after trimming its net loss in the fourth quarter as a more than doubling of online sales offset the impact of extensive store closures due to government-mandated lockdowns.

See also: Indigo gets quarterly revenue boost from online shoppers as full-year sales decline

The Toronto-based retailer says it lost $39.5-million for the three months ended April 3, compared with a loss of $171.3-million a year earlier when it took large impairment and deferred tax charges.

Revenues increased 11.7 per cent to $199-million from $178.1-million in the fourth quarter of 2020.

For the full-year, Indigo lost $57.9-million or $2.09 per share, compared with a loss of $185-million or $6.72 per share in 2020.

Revenues fell 5.5 per cent to $904.7-million from $957.7-million.

Key markets like Greater Toronto Area were impacted for around six months, including over the holiday period.

“This sustained acceleration in e-commerce presents an extraordinary opportunity for Indigo,” stated CEO Heather Reisman. “The new initiatives we are embarking on, from further assortment expansion to becoming a truly omni-channel retailer, strategically align the business to deliver profitable growth.”

With files from staff and wires

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