By Michelle Zadikian, Hilary Punchard and Daniel Johnson , BNN Bloomberg
Tech stocks led a broad-based decline on the S&P/TSX Composite Index on Monday as investors looked ahead to a Bank of Canada interest rate decision and U.S. inflation data later this week.
The TSX fell 206.06 points or one per cent to 18,816.80. Shopify weighed on the index, closing down 8.85 per cent to $42.00 per share.
Rogers Communications Inc. shares closed 4.61 per cent lower at $58.70 as the company deals with the fallout from a widespread network outage on Friday.
In an interview, Rogers Chief Executive Officer Tony Staffieri said he’s still committed to obtaining approval for the company’s $20-billion proposed takeover of Shaw. He also said he’s focused on stabilizing the Rogers network and regaining customer trust.
Staffieri, along with other telecom executives, met with Innovation, Science and Industry Minister Francois-Philippe Champagne afternoon to discuss the outage and how a similar situation can be prevented in the future. Champagne’s office has not yet signed off on the Shaw acquisition.
“Overall, I think this is a situation that will not bode well for Rogers and their takeover deal,” said Allan Small, a senior investment advisor of Allan Small Financial Group at IA Private Wealth, in an interview Monday.
“I think there’s definitely an argument for competition. We only have a few major companies in the telecom space. I know in the U.S. they have a few more, but they’re also pretty concentrated,” he said.
Shares of Suncor Energy Inc., meanwhile, fell 2.14 per cent to $41.52. The oil giant cancelled its planned investor update after Mark Little’s resignation as chief executive in the wake of yet another worker fatality. The update was supposed to centre on the company’s operational performance and workplace safety.
Markets in New York also fell Monday. The S&P 500 closed 1.15 per cent lower, the Dow Jones Industrial Average dipped 0.52 per cent and the Nasdaq tumbled 2.26 per cent.
Shares of Twitter, Inc. sank 11.30 per cent after Elon Musk announced on Friday that he’s terminating his US$44-billion agreement to buy the social media platform.
In a regulatory filing, the Tesla, Inc. chief executive said claimed Twitter had not complied with his request to “make an independent assessment of the prevalence of fake or spam accounts on Twitter’s platform.”
“This is really going to be a Game of Thrones legal battle because Twitter’s going to argue that there was no material breach and Musk still should be held to the deal. That’s really what they’re going go for,” said Dan Ives, managing director of equity research at Wedbush Securities, in an interview Monday.
“Breakup fee is a billion, there can be punitive damages clearly there as well. The biggest problem for Twitter starting today: it’s a public company, axed the Musk bid, a lot of factors in terms of employee turnover, advertising and other issues that they’re going to have to face.”
Ives called Musk’s Twitter takeover termination a “nightmare scenario” and said he thinks US$25 to US$30 per share would be fair value now that the deal is off the table.
Benchmark West Texas Intermediate crude was down 1.09 per cent Monday to settle at US$103.65 per barrel.
The Canadian dollar ended at 76.90 cents U.S., down 0.46 per cent.