TD Slips As Markets Sort Cowen Deal Details, Molson Revenues Lose Fizz

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Canada's TD optimistically expands in US, Sierra Wireless jumps on Semtech buyout

Canadian stocks fell on Tuesday as investors digested Toronto-Dominion's $1.3 billion deal to buy US investment bank Cowen, looking to broaden its reach in several markets, particularly inside the US.

The S&P/TSX Composite Index shed one percent, and the blue-chip S&P/TSX 60 Index fell 0.9%.

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Meanwhile, data showed that July Canadian manufacturing slowed, and new orders notched their first drop since early in the pandemic.

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Online retailer Shopify (TSE:SHOP , NYSE:SHOP ) rose 9% after it said it would partner with Klaviyo, which would serve as the online retail site's recommended email solution for its heaviest users.

In one of the day's more unusual stories, Lundin Mining (TSE:LUN ) shares fell 7% after the company confirmed earlier reports that a sinkhole had encroached on an area near its Minera Ojos del Salado operations in Chile over the weekend. The sinkhole hasn't affected operations, Lundin said Tuesday.

TD Shares Fall

Toronto-Dominion Bank (TSE:TD ) agreed to acquire Cowen Inc. in hopes of expanding its US business across several markets, including equities, research and M&A. Executives said Tuesday that Cowen buy should boost revenue by more than 30%, to about $7 billion. TD shares fell 0.4%.

The company said that TD's purchase would increase its revenue by one-third and bring global revenues to just under C$7 billion while doubling US revenues. The new company will be called TD Cowen upon closing.

The broader banking sector collectively slipped 0.8%.

Molson's Revenues Fell Short

Brewing icon Molson Coors (TSE:TPX.B ) shares fell 9% Tuesday when it reported second quarter financial results. The company said adjusted earnings were $1.19 in the quarter, a penny ahead of estimates. However, its revenues fell short of the $2.94 billion analyst estimate, landing at $2.92 billion.

The company said providing guidance was complex with inflation and COVID-19's hit-and-run outbreaks, but it did venture to say it expects a mid-single-digit revenue 2022 revenue bump.

In contrast, shares of e-commerce giant Shopify Inc rallied 8.9%, adding to their recent rebound. Shopify rises 9% after announcing a product partnership with Klaviyo, in which Klaviyo will serve as the recommended email solution partner for Shopify Plus for merchants with higher-volume sales.

Lundin Mining dropped 6.9% after the company confirmed after market close on Monday that a sinkhole was detected near its Minera Ojos del Salado operations in Chile on July 30, 2022. The firm says there has been no impact on personnel, equipment or infrastructure. 

Internet connectivity firm Sierra Wireless Inc.'s (TSE:SW ) shares rose 6.8% in after-hours trading. Semtech is buying the company for about $1.2 billion, or $31 a share. That's a 25% premium to Sierra's closing price on Friday, the last trading session before the announcement.

Article by Greg Morcroft, Fintel

Updated on Aug 3, 2022, 3:33 pm

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