GameStop Value Surges Past $10 Billion After Musk Tweet
Depending on who you ask, the frenzy around GameStop is either:
- “Unnatural, insane, and dangerous,” in the words of The Big Short’s Michael Burry, who also said in a now seemingly-deleted tweet that there should be “legal and regulatory repercussions.”
- A sign of “frothiness” around the “fringes” of the market in the words of CIBC CEO Victor Dodig, who addressed the issue in an interview with Amber Kanwar.
- A short seller’s worst nightmare. Case in point, Citron’s Andrew Left released a video on YouTube today disclosing that he covered “the majority of the [GameStop] short in the $90s at a loss, 100 per cent.”
- Something to pump up even more, as Tesla CEO Elon Musk did in a one-word, “Gamestonk!!” tweet yesterday.
Where does all of this leave us? We’ll get into the prospect of a regulatory clampdown with Hansell LLP Partner Susan Kushneryk in The Open. And we’ll of course keep an eye on GameStop, whose shares are spiking again in pre-market trading after nearly doubling yesterday.
MARKET CATALYSTS AHEAD
It’s a Fed day, with the U.S. central bank set to release a rate decision and assessment of the economy at 2 p.m. followed by Chair Jerome Powell’s Q&A with reporters. Stands to reason there will be plenty of questions about the Biden administration’s COVID relief package, not to mention scrutiny of Powell’s words on the runway for monetary stimulus. And The Close will have its hands full, with earnings due from Apple, Facebook and Tesla after 4 p.m.
IN CONVERSATION WITH JJ RUEST
We're looking forward to speaking with the chief executive of Canadian National Railway this afternoon. His company just reported a 17 per cent rise in fourth-quarter profit thanks to a sharp increase in revenue from grain shipments. CN is calling for high single-digit profit growth this year and is showing its confidence by raising the quarterly dividend and launching a new share buyback program. Plenty to cover with Ruest at 1 p.m.
Lots happening in the global race to secure vaccine supplies. While Canada struggles, the U.S. is ramping up, with President Joe Biden yesterday announcing a plan to haul in an additional 100 million doses each of the Moderna and Pfizer vaccines. Meanwhile, the European Union and AstraZeneca are in a fast-evolving dispute amid confusion over whether there will be an emergency call to discuss delivery delays.
BIDEN RELEASING CLIMATE PLAN
It’s shaping up to potentially be a big day for the future of the fossil fuel industry and the transition to cleaner energy. U.S. President Joe Biden will unveil executive actions today that, based on The New York Times’ reporting yesterday, will include a full-scale review of new leases for oil and gas drilling. Before Biden speaks, his special climate envoy John Kerry will address reporters at the daily White House briefing. We’ll track it all.
OTHER NOTABLE STORIES
- Canadian Pacific Railway today proposed to split its stock on a five-for-one basis. Shares have almost tripled over the last five years and closed yesterday at $434.07.
- Microsoft is shaping up to be a market mover, with shares rising in pre-market trading after it reported a 33 per cent surge in fiscal second-quarter profit per share. Revenue rose in all the major divisions, led by a 23 per cent pop in cloud-based sales. CEO Satya Nadella said the world is witnessing "the dawn of a second wave of digital transformation sweeping every company and every industry."
- It's a glass half-full, glass half-empty story at Starbucks. Global same-store sales fell 5 per cent in the latest quarter as comparable transactions plummeted 19 per cent. But loyal customers were really loading up when they did visit, as the average purchase value surged 17 per cent.
- Edmonton-based Flair Airlines announced this morning it’s adding 13 737 Max 8 jets to its fleet. The aircraft aren’t being purchased; instead, they’re being leased from financier 777 Partners.
- We’ve got CGI CEO George Schindler on deck this afternoon. His IT firm – a Montreal-based global juggernaut – just reported a 23.5 per cent surge in first-quarter bookings.
- Notable data: U.S. durable goods orders
- Notable earnings: CP Rail, AGF Management, Apple, Facebook, Tesla, Boeing, AT&T, Abbott Laboratories
- 9:30 a.m. ET: U.S. Senate Energy and Natural Resources Committee holds hearing to consider Jennifer Granholm’s nomination as energy secretary
- 11 a.m. ET: White House COVID-19 Response Team holds press briefing
- 12:15 p.m. ET: U.S. Special Presidential Envoy for Climate John Kerry and National Climate Advisor Gina McCarthy join White House press briefing
- 12:30 p.m. ET: CIBC CEO Victor Dodig addresses Canadian Club of Toronto
- 1:30 p.m. ET: U.S. President Joe Biden delivers remarks and signs executive actions on tackling climate change
- 2 p.m. ET: U.S. Federal Reserve releases interest rate decision (plus 1430 news conference)
- Anniversary of National Microbiology Lab in Winnipeg confirming Canada's first novel coronavirus case