A survey of North American equities heading in both directions
On the rise
AtkinsRealis Group Inc. (ATRL-T) surged 5.8 per cent after saying it plans to sell its stake in the company that owns the Highway 407 ETR toll highway north of Toronto by the end of 2027.
The company formerly known as SNC-Lavalin announced the plan as part of an investor presentation outlining the company’s latest goals and financial targets. It says the sale is part of its move to focus on its engineering services and nuclear businesses.
AtkinsRealis holds a 6.76-per-cent stake in 407 International Inc.
The other owners of the toll highway are the Canada Pension Plan Investment Board with a 50.01 per cent stake and Cintra Global S.E., a wholly owned subsidiary of Ferrovial S.A., at 43.23 per cent.
In its outlook, AtkinsRealis says it’s looking to pursue margin expansion and growth.
It says it will also aim to expand investments in rapidly growing markets, including initiatives in engineering services across the U.S., utilizing its nuclear expertise and investing in accretive mergers and acquisitions.
Brookfield Asset Management (BAM-T) closed flat after saying it is looking to raise US$5-billion for a fund backed by the United Arab Emirates (UAE) that aims to scale up climate finance in emerging markets.
The fund, dubbed the Catalytic Transition Fund (CTF), was announced at the COP28 climate talks in Dubai last December, but this is the first time Brookfield has confirmed its target size.
Anchored by a US$1-billion commitment from the US$30-billion UAE-based ALTÉRRA fund, the first close of the CTF is expected by the end of 2024, Brookfield said in a statement.
The first close of a fund refers to when it has secured enough commitments to start making investments.
Excluding China, developing economies get less than 15 per cent of the world’s clean energy dollars despite being responsible for nearly a third of global emissions, and as a result investments there can often have a bigger impact, Brookfield said.
Returns to the ALTÉRRA fund will be capped at an unspecified amount, allowing other investors to secure better risk-adjusted returns. At least 10 per cent of the fund’s capital will be provided by Brookfield, which manages US$925-billion in assets.
“The Catalytic Transition Fund is a private market solution to the global challenge of delivering transition investment to emerging markets,” said Mark Carney, Chair and Head of Transition Investing at Brookfield Asset Management.
Shares of Tesla Inc. (TSLA-Q) rose almost 3 per cent on Thursday as shareholders appeared poised to vote in favor of a US$56-billion pay package for Elon Musk and to move the electric vehicle maker’s legal home to Texas.
“Thanks for your support!” Mr. Musk said on his social media platform X late Wednesday. In his post, Mr. Musk included charts showing that the resolutions were set to pass, though shareholders are allowed to change their vote up to the start of the annual meeting.
Approval of the largest pay deal in U.S. corporate history could allay investor concerns about Mr. Musk’s future at the company, while giving the electric carmaker ammunition in its fight to reverse a court decision to void the pay package.
A person familiar with the preliminary voting tally said a combination of big institutional investors and retail investor votes were responsible for the support.
The result will be announced at a meeting at Tesla’s headquarters in Texas at 4:30 pm ET on Thursday.
Mr. Musk would still face a lengthy legal battle to convince the Delaware judge who said the Tesla board was “beholden” to him, while potentially fielding fresh lawsuits over the latest vote.
“Even if the shareholders do approve the old package, it is not clear that the Delaware court will allow that vote to be effective,” said Adam Badawi, a law professor at UC Berkeley.
Strategy and digital technology consulting firm Alithya Group Inc. (ALYA-T) gained 0.4 per cent following the premarket announcement of a fourth-quarter 2024 earnings beat and the release of its three-year outlook.
The Montreal-based company reported revenue of $120.5-million, down 11.5 per cent from the same period a year ago below the Street’s expectation of $126-million, but adjusted EBITDA of $10.5-million topped the consensus projection of $10.2-million as EBITDA margins rose almost 1 per cent year-over-year to 8.1 per cent.
Alithya said it is aiming from 5-10-per-cent organic growth over the next three years along with EBITDA margins of 11-13 per cent. Targeted acquisitions are expected to add $150-million of revenues.
“We view the Q4 results as positive for ALYA as the company’s gross margins showed significant improvement in the face of the banking sector headwinds that have negatively impacted top line growth,” said Acumen Capital analyst Jim Byrne.
Toronto’s Bitfarms (BITF-T) jumped 15.9 per cent after the bitcoin miner announced an agreement to develop up to 120 MW of power capacity in the United States and provided a production outlook for 2025.
Separately, Riot Platforms said Bitfarm’s move to adopt a poison pill to thwart its acquisition attempt was “shareholder unfriendly” and highlighted the lack of solid corporate governance standards.
Riot said on Wednesday it had privately urged Bitfarms to remove its chairman and interim CEO, Nicolas Bonta, and add at least two new independent directors to its board.
The dispute stems from an unsolicited offer Riot made in April to acquire Bitfarms for about $950-million. Bitfarms rebuffed the offer, saying it significantly undervalued the company, and approved a poison pill plan to prevent any attempts of a hostile takeover.
Under the plan, if an entity takes more than 15-per-cent stake in the company after June 20 and up to Sept. 10, Bitfarms will issue fresh shares to other stockholders, diluting the entity’s stake.
The 15% trigger “is in direct conflict with established legal and governance standards,” Riot said on
Broadcom (AVGO-Q) surged 12.3 per cent on Thursday as its upbeat annual forecast highlighted an insatiable demand for chips used in powering AI-focused technology, while its announcement of a stock split added to the euphoria.
The rising adoption of generative AI has been driving demand for companies such as Broadcom that provide chips and networking tools to support these intensive applications.
Broadcom, whose shares have risen 76 per cent in the past 12 months and closed at US$1495.5 on Wednesday, joined Nvidia (NVDA-Q) in trying to make its stock more affordable through a 10-for-1 split.
“It’s a sure-fire way to send your stock soaring,” Triple D Trading analyst Dennis Dick said, adding the move was “right out of Nvidia’s book.”
If the gains hold, Broadcom will add more than US$90-billion to its market value.
Broadcom now trades at about 28 times expected earnings, compared with a price-to-earnings ratio of about 40 for Nvidia and rival Marvell Technology (MRVL-Q).
The company on Wednesday raised its forecast for annual revenue from AI-linked chips to US$11-billion from US$10-billion. It also raised its annual revenue and core profit projections.
Broadcom said it will make the next generation of custom AI chips for “hyperscaler” clients, which are widely considered to be Alphabet’s Google and Meta Platforms. The company said in March it added a third custom AI chip customer.
“We continue to see Broadcom as incredibly well-positioned to benefit from rising generative AI investment in the long term,” Morningstar analysts said.
Broadcom’s software division has benefited from its buyout of VMware, which added US$2.7-billion to its second-quarter revenue.
“After this stunning earnings report and a 10-for-1 stock split announcement. If you don’t hold Broadcom, you have a hole in your portfolio,” said Paul Marino, chief revenue officer of GraniteShares, which holds Broadcom stock through its ETFs.
On decline
Corus Entertainment Inc. (CJR-B-T) plummeted over 19 per cent after revealing it is cutting jobs at its Global News division as it seeks efficiencies across the company and battles adverse trends in the media industry.
The cuts came a few days after Corus said it stands to lose programming next year due to an arrangement struck between Warner Bros. Discovery Inc. (WBD-Q) and Rogers Communications Inc. (RCI-B-T) , which will see Rogers pick up rights to content such as HGTV and Food Network.
“As part of our ongoing evaluation of our business and continued enterprise efficiency review across Corus, we have made some changes at Global News today, and as a result, certain roles have been impacted,” Corus spokesperson Anna Arnone said in a statement.
“These changes correlate with the current economic and regulatory reality we, and other media organizations, find ourselves in. We are continuously working to improve the way we gather, produce and deliver award winning content.”
- Pippa Norman
Space tourism company Virgin Galactic (SPCE-N) announced a 1-for-20 reverse stock split on Wednesday, sending its shares down.
The stock split is expected to go into effect on June 14 after markets close and resume trading on a split-adjusted basis after markets open on June 17.
The company is planning the stock split to meet minimum share price requirements to continue listing on the New York Stock Exchange, Virgin Galactic said.
The company’s shares have fallen more than 65 per cent so far this year.
U.S.-listed shares of Stellantis (STLA-N) declined after CEO Carlos Tavares told investors on Thursday it will stick to its “asset light” strategy on China, mainly focused on exporting to the country rather than manufacturing there.
Stellantis’ investor day came a day after the European Union, one of the Franco-Italian carmaker’s largest markets, said it would impose extra duties of up to 38.1 per cent on imported Chinese electric vehicles from July.
Beijing criticized the EU tariffs on Thursday as protectionist behaviour and said it hoped the European bloc would correct its “wrong practices” and handle trade frictions through dialogue.
Mr. Tavares has previously criticized EU tariffs on imported Chinese cars.
“What is clear is that we don’t want to be defensive,” he said on Thursday, referring to tariffs on Chinese cars. “Our strategy that remains an asset-light strategy is about making sure that we are ourselves offensive and surfing the wave of the Chinese offensive,” he said during a presentation at the investor day in Auburn Hills, Michigan.
“Our asset light strategy in China is much more robust than that of many of our competitors.”
Stellantis has bought a 21-per-cent stake in Chinese automaker Leapmotor and has formed a venture with it allowing the European automaker to sell and manufacture Leapmotor’s vehicles outside China.
Stellantis leads the JV with a 51-per-cent stake.
Earlier on Thursday Stellantis, whose brands include Fiat, Peugeot, Jeep and Ram, maintained its 2024 financial forecasts and said it aimed to improve its dividend payout next year.
Liberty Global (LBTYA-Q) was lower on news it is taking a controlling interest in electric car racing series Formula E after buying shares held by Warner Bros Discovery (WBD-Q).
The acquisition will, on completion, leave Liberty with a 65-per-cent stake in a world championship that is now in its 10th season.
Formula E CEO Jeff Dodds said in a statement the announcement came as the electric series planned for a period of growth and was “a powerful vindication of the huge potential of our sport”.
While telecoms group Liberty Global will control Formula E, Liberty Media are the commercial rights holders for the much bigger Formula One business. Both are chaired by U.S. billionaire John Malone.
With files from staff and wires
David Leeder