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AMC leads gains in Reddit favourites as focus shifts to silver – BNN

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AMC Entertainment Holdings Inc. and some other Redditor favorites extended January’s advance on Monday, while GameStop Corp.’s rally paused, as brokerages removed trading restrictions from all but the most volatile stocks.

AMC rose 26 per cent to US$16.50 at the start of Monday’s session, while GameStop sank as much as 13 per cent at 9:31 a.m. in New York. The video-game retailer surged 1,625 per cent last month, propelled by day traders using Reddit forums to take on the Wall Street establishment and inflict multibillion-dollar losses on hedge funds with large short positions.

Robinhood Markets Inc. is continuing to impose trading curbs on GameStop, movie-theater chain AMC and six other stocks, but on Sunday removed restrictions on 42 others. Clients can buy only 1 share in GameStop, and as many as 10 in AMC. The popular trading app put buying limits in place last week after its clearinghouse deposit requirements for equities increased. Other brokerages including Morgan Stanley’s E*Trade also eased restrictions.

The restrictions held the number of shares traded for the Grapevine, Texas-based video game retailer in check while AMC volume took off. At 9:31 a.m. in New York, just 3.5 million GameStop shares had been traded while AMC’s volume was at 80 million, making it the most actively traded stock on Monday morning worth a dollar or more.

CMC Markets, a UK-based financial services company, is only allowing long trades on a handful of Reddit-touted companies including AMC and GameStop, according to a spokesman. Among other stocks recently favored by the Reddit community, cannabis firm Sundial Growers Inc. gained 21 per cent while Healthier Choices Management, which trades at fractions of a penny, soared as more than a billion shares changed hands.

While AMC shares ruled Monday morning, the movie theater chain was downgraded to sell from neutral by MKM Partners. Analyst Eric Handler cut the stock and halved his price target to US$1, saying that current share prices are almost double the industry’s historical peak.

“The emotion behind the #SaveAMC movement could carry the shares higher in the near-term, but we believe this valuation-be-damned momentum is not sustainable over the long term,” he wrote.

Shift to Silver

The attention of the retail speculators looked to be shifting over the weekend to commodities such as silver, which broke above US$30 an ounce in a move that like GameStop and AMC can be traced back to Reddit’s WallStreetBets forum.

“The emotion behind the #SaveAMC movement could carry the shares higher in the near-term, but we believe this valuation-be-damned momentum is not sustainable over the long term,” he wrote.

European-listed silver miners surged, with Fresnillo Plc rising as much as 21 per cent in its biggest intraday gain since 2008, and Hochschild Mining Plc climbing 18 per cent. U.S.-listed peers also skyrocketed in early trading, with First Majestic Silver Corp. and McEwen Mining Inc. both rising as much as 32 per cent.

“So far, it is not exactly the GameStop anomaly, but it is a hint that the retail traders who just discovered the strength of their unity are out there, looking for new targets — and apparently bigger ones,” Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said in written comments.

–With assistance from Joe Easton.

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Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

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TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

The Canadian Press. All rights reserved.

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Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

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VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

The Canadian Press. All rights reserved.

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Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

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MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

The Canadian Press. All rights reserved.

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