Steady Week on Bay St. Ends in Sell Off
The markets ended the week by taking a beating. Friday closed with the Dow Jones Industrial Average down 905 points and the TSX closed down 487 on the day. The Wall Street Journal cited a new COVID-19 variant coming out of South Africa as the reason for the sell off. I think that could be compounded with the beginning of tax loss selling, which is common after the U.S. Thanksgiving holiday.
On Monday, Pembina Pipeline Corp. (closed Friday at $38.72, approximately 550 million shares issued) announced the resignation of Mick Digler, the company president and CEO. Scott Burrows was appointed interim president and CEO. Mr. Burrows has been the CFO of Pembina for seven years. The company owns a system of pipelines for transporting oil and gas primarily in Western Canada.
Also on Monday, Consolidated Uranium Inc. (closed Friday at $2.70, approximately 60 million shares issued) closed a $20-million bought deal financing. The company issued 7.54 million units at $2.65 per unit. The unit includes a share and a half warrant, with each full warrant being exercisable for one share of the company at $4, eligible until Nov. 22, 2023. The company is developing uranium projects in four countries including Canada and the U.S.
On Tuesday, Parkland Corp. (closed Friday at $33.54, approximately 152 million shares issued) began a temporary halt on its refinery processing plant operations at its Burnaby facility. The halt is in response to a lack of supply caused by disruptions to the Trans Mountain Pipeline, which occurred on November 14, 2021. Later in the week, Parkland closed an $800-million (U.S.) note offering of 4.625% senior notes due 2030. Parkland operates convenience stores and is a supplier and marketer of fuel and petroleum products.
Wednesday brought more good news for the lithium sector. Standard Lithium Ltd. (closed Friday at $12.60, approximately 147 million shares issued) agreed to receive a $100-million (U.S.) investment from Koch Strategic Platform, a subsidiary of Koch Investments Group. The company will issue 13.48 million shares to Koch Strategic at $9.43 per share. Later in the week, Standard Lithium released the preliminary economic assessment for its lithium project in Southwest Arkansas. The PEA pegged the property’s pretax net present value at $2.83-billion (U.S.), which includes an 8% discount rate.
Thursday was Thanksgiving in the U.S. and the Canadian markets were typically quiet. However, on Thursday, Constellation Software Inc. (closed Friday at $2,194.86, approximately 21 million shares issued) created a $200-million venture capital fund called VMS Ventures. The fund will seek investments in the software industry.
Throughout the week, there were quite a few companies reporting quarterly financial results. Ayr Wellness Inc. (closed Friday at $22.90, approximately 49 million shares issued), a multistate cannabis operator, lost $3.37-million (U.S.) on revenue of $45.5-million (U.S.) in Q3 2021. This is compared with a net income of $620,373 (U.S.) on revenue of $96.2-million (U.S.) in Q3 2020. Organigram Holdings Inc. (closed Friday at $2.70, approximately 299 million shares issued), a Canadian cannabis company, lost $25.97-million on revenue of $24.86-million in fiscal Q4 2021 ended Aug. 31, 2021. This compares with a loss of $38.59-million on revenue of $20.4-million in fiscal Q4 2020. Alimentation Couche-Tarde Inc. (class B shares closed Friday at $46.52, approximately 814 million class B shares issued), a company that has convenience and fuel retail stores in 26 countries and territories, earned $694.8-million (U.S.) on revenue of $14.21-billion (U.S.) in fiscal Q2 2021 ended Oct. 10, 2021. This compares with $757-million (U.S.) on revenue of $10.65-billion (U.S.) in fiscal Q2 2020. Alimentation also increased its dividend to 11 cents per share, which represents a 25.7% increase.