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From: Joachim K2/10/2021 11:50:02 AM
   of 117

The cannabis comeback: Why Aphria’s shares tripled in one month - and the whole sector is booming. Again.

They were left for dead, or something very close to it.

Cannabis producers were shut out of capital markets in 2019, reeling from writedowns sometimes worth hundreds of millions of dollars and struggling to forecast any profits for the foreseeable future.

Starved of fresh cash to fund their growth – and in some cases, to simply finish their production facilities – the sector nosedived. The Horizons Marijuana Life Sciences Index , which tracks the industry’s stocks, lost three-quarters of its value in one year.

Yet, after all of that, cannabis companies are roaring back. In some cases, they are worth more than ever.

Since Democrats took control of the Senate after January’s run-off election in Georgia – making U.S. legalization much more likely – Aphria Inc.’s shares have almost tripled in value. They closed at $30.09 on Tuesday after gaining 25 per cent in a single day – on no news. Its shares are now worth far more than $22.89, their record price during the first cannabis boom.

Industry giant Canopy Growth Corp. has also soared, climbing another 12 per cent Tuesday on the back of quarterly earnings. The big reveal this quarter was that management committed to reporting positive earnings before interest, taxes, depreciation and amortization by the middle of fiscal 2022. Investors seemed to like that, even though Canopy also reported a $829-million loss and added that it won’t have positive free cash flow until fiscal 2024.

Even the smaller players who had been almost completely written off by investors are seeing major market gains – though, they remain far off their peaks. Green Organic Dutchman Holdings Ltd. has more than doubled in value this year, and Supreme Cannabis Company Inc. is up 168 per cent over the same period.

The best explanation for these exceptional gains? The recent retail investor euphoria has spread to cannabis. This is a sector with a history of attracting typical day traders – including Reddit users, who became known as the cannabis bros during the previous bubble.

Of course, there are tangible developments, notably the potential for U.S. legalization, which would make it much easier for cannabis companies to raise money in the United States. Many producers are also reporting revenue growth. In this country, legal cannabis sales recently surpassed the black market, according to Statistics Canada.

The industry has also cleaned up. Many management teams have been replaced, meaning they are no longer led by the cowboys who ran straight into a wall during the previous boom. The big players are even adopting reporting traits of established industries. “Encouragingly, our sole Outperform-rated Canadian cannabis company is showing the characteristics of a more mature consumer packaged goods company, introducing medium-term guidance on sales, EBITDA and cash flow,” Cowen & Co. analyst Vivian Azer wrote in a note to clients Tuesday.

For all these reasons, cannabis companies have been able to raise fresh funds again. Supreme Cannabis just sold $23-million worth of shares in January, and Valens Company Inc. raised $40-million. Even Aurora Cannabis Inc., which is an outlier today because its shares remain decimated relative to their peak values, was recently able to raise US$138-million.

But just like the previous boom, the recent hype can’t mask the fundamental issues.

The Canadian market is awash in cannabis, for one, and prices here are still too high in consumers’ minds, according to a recent survey from Bank of Montreal and Drop Insights. “In the face of increasingly tougher consumer expectations, some more consolidation and much more rationalization are needed to improve industry fundamentals,” BMO analysts wrote in a note to clients last month.

While U.S. legalization is certainly looking more likely, most analysts now expect it to be at least a year away as Congress remains preoccupied with COVID-19. Then, even if it is passed, it’s not as though the U.S. will offer carte blanche for Canadian companies. There are scores of MSOs – multistate operators – already in business there, because many states have already legalized recreational use.

If this is another bubble, it may simply take time for the rise and fall to play out. The prospect of U.S. legalization is a major catalyst, and the sector has already seen two others like it in its short history – Constellation Brands’ multipart investment in Canopy Growth, and the signing of the 2018 U.S. farm bill.

“In each instance, the sector’s positive momentum lasted for roughly two to three months,” CIBC World Markets analysts John Zamparo recently wrote in a note to clients. “We expect the sector’s run essentially restarted the clock following [January’s] run-off elections.”

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From: Joachim K2/10/2021 11:50:40 AM
   of 117
Stocks erase earlier gains and turn lower amid weakness in Big Tech

U.S. stocks wiped out earlier gains and traded in the red on Wednesday as investors rotated out of major technology stocks.

The Dow Jones Industrial Average erased a 130-point gain to trade slightly lower in the volatile session. The S&P 500 dipped 0.2% and the Nasdaq Composite fell 0.6%, after both hit all-time highs earlier in the session. Amazon, Apple, Alphabet, Microsoft, Facebook and Netflix all slid into negative territory.

The major averages rallied to record levels earlier as investors cheered a batch of solid corporate earnings as well as data showing subdued inflation.

The U.S. consumer price index rose 0.3% in January, matching expectations from economists polled by Dow Jones. The core consumer price index, which excludes volatile food and energy costs, was unchanged last month.

"One of the concerns is that inflation will start to take hold due to so much monetary and fiscal stimulus, which will cause the Treasury and the Fed to intervene," said Keith Buchanan, senior portfolio manager at Globalt. "Any news indicates that inflation will be lower for longer will delay that potential reaction to pull some of the stimulus back."

Coca-Cola rose 0.4% after the company topped Wall Street's estimates for its fourth-quarter earnings with cost-cutting efforts. Under Armour jumped more than 7% after reporting a surprise profit for the holiday quarter as sales were boosted by strong digital growth.

Twitter popped about 9% after the social media company beat Wall Street's earnings and revenue expectations.

Traders will also be watching closely Federal Reserve Chairman Jerome Powell's speech before The Economic Club of New York at 2:00 p.m. ET.

Wall Street is having a strong February with the S&P 500 up more than 5% so far. Investors remained optimistic about additional Covid-19 stimulus. House Democrats unveiled the details of a relief proposal that included $1,400 direct checks with faster phase-outs than previous bills.

"The virus is continuing to mutate, vaccines are taking longer than expected to distribute and achieving herd immunity seems as if it will take a lot longer as a result," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. "On the bright side, massive fiscal stimulus and an extremely accommodative Federal Reserve should keep equities moving higher while we wait for those setbacks to be resolved."

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From: Joachim K2/12/2021 1:20:47 AM
   of 117

Here's what you can do if you have extra savings during the pandemic

Statistics Canada says household savings rate hit 27.5% in 2nd quarter of 2020

February 11, 2021

Many Canadians have been spending more time at home since the start of the COVID-19 pandemic and that's helped them curb their spending and put more money than ever into their savings.

According to Statistics Canada, the household savings rate hit an all-time high at 27.5 per cent in the second quarter of 2020, before easing to 14.6 per cent in the third quarter. Economists estimates it will be around 13 per cent in the fourth quarter as the pandemic continued into 2021.

In 2019, the average savings rate was 1.4 per cent.

Personal finance journalist Rubina Ahmed-Haq says Canadians should use this opportunity to pay down debts, invest and start an emergency fund.

Here is part of Ahmed-Haq's conversation with Canada Tonight host Ginella Massa on how Canadians can take advantage of their extra money.

What advice can you give to Canadians who are interested in getting into investing?

It's never a bad time to invest, Haq said, but she recommends people avoid day trading and look into long-term investments as the markets right now are very volatile.

"The market news right now should be seen as entertainment. You should still be making the same kinds of decisions that you would make a year ago [or] two years ago," Haq said.

She recommends Canadians invest in companies that have a good history of growth but still have lots of potential and pay a dividend.

What advice can you give to people interested in investing in cryptocurrency?

Haq says it's a volatile market and people should be prepared to watch their investment fluctuate.

Bitcoin hits new all time high after Tesla reveals it has stockpiled $1.5B of it

ANALYSIS Pandemic optimism and bubble warnings leave investors wondering who to trust

Bitcoin, for example, has had a history of reaching new heights followed by dramatic falls in value, she said.

How can Canadians take advantage of the extra money they've saved?

For Canadians who have a lot of debt, Haq recommends paying down their high interest debts and making lump sum payments to their mortgages in order to "service your debt much more easily."

If you've taken care of all that, then she said the next best step is to start an emergency fund.

"When the pandemic was declared, those people who had some cash on the side that they could tap in the case of an emergency, they just felt much more comfortable," she said.

It's been a weird year with the pandemic, how can Canadians prepare for tax season?

The most important number to know, according to Haq, is how much you made in total income in 2020 — including money from employment insurance or the Canada emergency response benefit.

Some self-employed Canadians caught up in CERB confusion won't have to repay: PM

Bracing for 'a tax season like no other,' CRA hires private firm to answer Canadians' questions

She recommends using a "simple income tax calculator" to find out how much income tax and other taxes you will owe and compare that to the information you've given to the Canadian Revenue Agency (CRA).

"And if you feel that you are going to have a tax bill, you could make an RRSP (registered retired savings plan) contribution before the deadline ... to reduce your overall income tax bill to (the) Canada Revenue Agency," she said.

With files from Canada Tonight

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From: Joachim K2/12/2021 1:21:18 AM
   of 117

FEBRUARY 11, 2021 / 07:23 PM

U.S., with Trump gone, seeks to build bridges on global economy

LONDON (Reuters) - Global finance chiefs meet on Friday for the first time since Joe Biden replaced Donald Trump as U.S. president, vowing to rebuild bridges with allies to steer the world economy out of its deepest slump since the Great Depression.

U.S. Treasury Secretary Janet Yellen, a familiar face to global policymakers from her days in charge of the Federal Reserve, will join her counterparts from the Group of Seven (G7) rich nations for the online discussions.

Britain’s finance minister, Rishi Sunak, who will co-chair the talks, wants the meeting to send a fresh signal that trillions of dollars of stimulus from G7 members will not be scaled back while COVID-19 vaccinations are still ramping up.

Biden has proposed a further $1.9 trillion in spending and tax cuts on top of Trump’s $4 trillion. Sunak is expected to say next month that he will extend his economic rescue programmes and fixing public finances will have to wait.

The meeting will try to revive attempts for a global approach to taxing giant digital firms, many of them American such as Amazon and Google, a test case for Washington’s return to engagement with the rest of the world.

The G7 was also likely to help low-income countries raise funds to fight the pandemic by backing a new allocation of the International Monetary Fund’s own currency.

The United States, the IMF’s dominant shareholder, is open to a new issuance of $500 billion in what would be another shift from the Trump administration’s stance, sources said.

As well as the United States and Britain, the G7 includes Japan, France, Germany, Italy and Canada whose finance ministers and central bank governors will be joined by the head of the European Central Bank and the IMF.

British Prime Minister Boris Johnson is due to host the first in-person summit of G7 leaders in nearly two years in June in a seaside village in Cornwall, southwestern England, which will focus on rebuilding from the pandemic and climate change.

Trump threw the G7 into chaos in 2018 when he said he was backing out of a joint communique after a leaders’ summit because of a trade dispute with Canada.

Britain wants to make climate change and biodiversity loss a top priority of it G7 presidency ahead of the COP26 conference it is due to host in November.

Writing by William Schomberg; Editing by Chizu Nomiyama

Our Standards: The Thomson Reuters Trust Principles

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From: Joachim K2/12/2021 1:22:29 AM
   of 117

Bombardier lays off another 1,600 people, scraps Learjet program

Aerospace company calls moves 'absolutely necessary for us to rebuild our company'

February 11, 2021

Bombardier Inc. says it will cut another 1,600 jobs and stop making Learjets, a business jet that has been around for almost 60 years.

The Quebec-based aerospace company announced the moves in posting its quarterly financial results, which showed the company lost $337 million US in the last three months of 2020.

The job cuts will bring the company's total workforce down to about 13,000 people around the world.

"Workforce reductions are always very difficult, and we regret seeing talented and dedicated employees leave the company for any reason," said Éric Martel, the company's president and chief executive officer.

"But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic."

About 700 of the job cuts are planned in Quebec and 100 in Ontario. A further 250 jobs will be eliminated in Wichita, Kan., where the Learjet is built. The rest of the job losses will be scattered across the rest of the U.S and Canada.

"The only thing the pandemic did was accelerate a sad ending," aerospace analyst Richard Aboulafia with the Teal Group said of the Learjet's demise.

Canadian companies feeling the pinch as coronavirus takes toll on their business prospects

Unifor, which represents 2,500 workers at a Bombardier facility in Montreal, is calling on the federal government to do more to help the aerospace industry survive the pandemic.

But many of Bombardier's problems predate COVID-19.

Slow decline

The company is currently a shadow of its former self, having gone from an integrated transportation conglomerate that made planes and trains of all shapes and sizes, into essentially a niche maker of business jets.

Its CSeries business, which was touted as the future of the company when it first took to the skies in 2013, was sold to Airbus in chunks in 2017 and then again last year for virtually nothing.

The company hired a new CEO in March 2020 and faced criticism at the time for the $17-million severance package of the one on the way out.

It recently sold its train-making business to European conglomerate Alstom for $3.6 billion, much less than initially thought.

Bombardier sells CRJ regional jet program to Mitsubishi for $550M

Today, the company's entire business largely consists of making two types of business jets, the Challenger series and the Global series. The company sold 44 of those jets during the quarter, down from 52 in the same period the year before.

For the year as a whole, the company sold 114 jets: 59 Globals, 44 Challengers, and 11 Learjets.

Learjets were first sold and flown in 1963, based on a design by inventor William Lear who was inspired by military jets The company was eventually acquired by Bombardier in 1990, and more than 3,000 Learjets have been sold over the plane's history.

More cuts expected

Lecturer John Gradek at McGill University's aviation management program said he suspects the Challenger jet could be next to get the axe as the company streamlines its business to be as efficient as possible, in an attempt to save up to $400 million a year.

"The only way they can do that significant cost cutting is to drop product."

In its outlook, the company said it expects this year to be a "transition year" but it expects revenue from selling jets to improve as the global economy recovers from COVID-19.

Analysts underscored just how uphill the company's climb is looking right now.

"While Bombardier outlined a series of restructuring efforts to improve earnings and cash generation, the company's current financial position highlights the significant heavy lifting that still needs to be done within the organization even after all these asset sales," TD Bank analysts Kevin Chiang and Krista Friesen said in a note to clients after the news came out.

Bombardier shares slipped about 5 per cent to 89 cents on the Toronto Stock Exchange on Thursday, which values the entire company at about $1.6 billion Cdn. That's against a total debt load of more than $10 billion.

In 2018, those same shares were worth about $5. The company's all-time value peaked in 2000 at roughly $25 a share.

Tough market

Gradek said the share sell off makes sense considering the company's prospects.

"They're becoming more of an elite business jet manufacturer and that's not a very comfortable place to be in given that business travel is down and people are being more careful about where they are spending their money."

The company's cheapest, entry level jet now starts at $30 million, while other plane makers have come to market with much smaller business jets that come with a price tag between $1 million and $2 million.

"The market is saying: 'I'm not sure that's the way to go.'"

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From: Joachim K2/12/2021 1:23:38 AM
   of 117
Disney smashes streaming subscriber expectations, boosting segments hurt by Covid

Disney reported earnings after the bell Thursday.

Disney said it now has almost 95 million paid subscribers to its Disney+ streaming service as of the quarter ended Jan. 2, helping to offset losses in other segments affected by the pandemic.

CEO Bob Chapek told analysts on the company earnings call that outlook for parks revenue and reopening is "really going to be determined by the rate of vaccination of the public."

Disney reported strong growth in paid streaming subscribers and its first quarterly profit since early last year in its earnings report for its fiscal first quarter of 2021 after the bell Thursday.

The stock was up around 1.7% after hours.

Here are the key numbers:

Earnings per share: 32 cents adjusted vs. loss of 41 cents expected, according to Refinitiv

Revenue: $16.25 billion vs. $15.9 billion expected, according to Refinitiv

Here's how the rest of the report went for Disney.


Disney said it now has almost 95 million paid subscribers to its Disney+ streaming service as of the quarter ended Jan. 2. This comes during the first quarter after Disney's free-trial period ended for some subscribers who are also Verizon customers.

Disney CFO Christine McCarthy told analysts on the company's earnings call that executives are "really happy with the conversion numbers that we've seen there going from the promotion to become paid subscribers."

Average monthly revenue per paid Disney+ subscriber, however, dipped 28% compared with the same quarter last year, from $5.56 to $4.03. That's because this number now includes subscribers to Disney+ Hotstar, which launched in India and Indonesia last year. The service has lower average monthly revenue per paid subscriber than traditional Disney+ in other markets, pulling down the overall average for the quarter.

On Disney's earnings call, McCarthy said that excluding Hotstar, average revenue per paid Disney+ subscriber would have been $5.37 in the quarter.

Average monthly revenue per paid subscriber grew slightly for Disney's other direct-to-consumer platforms, ESPN+ and Hulu, with the latter seeing 26% growth for those using its live TV service.

The company said it now has more than 146 million total paid subscribers across its streaming services as of the end of the first quarter.

Revenue for Disney's direct-to-consumer business grew 73% compared with the same quarter the previous year, to $3.5 billion. That growth helped to offset losses in other segments affected by the pandemic.


Revenue at Disney's parks, experiences and products segment fell 53% to $3.58 billion, as many of its theme parks were either closed or operating at reduced capacity and its cruise ships and guided tours were suspended.

CEO Bob Chapek told analysts on the company earnings call that outlook for parks revenue and reopening is "really going to be determined by the rate of vaccination of the public." Disneyland is hosting a vaccination site for Californians, and Chapek said the site has so far delivered more than 100,000 doses.

Chapek said he expects any reopening or increase in visitor capacity will include masking and social distance measures through the end of the year. But he said Dr. Anthony Fauci's prediction earlier Thursday that the vaccine would begin to be available to anyone who wants one in April would be a "game changer."

The company said the Covid-19 outbreak cost this division around $2.6 billion in lost operating income during the fiscal first quarter.

Content sales and licensing revenues decreased 56% to $1.7 billion during the quarter, as Disney had no new theatrical releases during October, November and December and limited home entertainment releases.

Notably, last year, the studio released "Frozen II" in theaters and had "Toy Story 4," "The Lion King" and "Aladdin" hit the home video market.

Disney expects capital expenditures for fiscal year 2021 to be similar to those for 2020, with the business investing more in the media and entertainment segment and less in the parks segment.

Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

Correction: An earlier version of this story misstated remarks from Christine McCarthy, the company's chief financial officer, regarding Disney's plans to disclose future subscriber numbers for Disney+. The company does in fact plan to provide subscriber number updates as of the end of each quarter going forward. It might not provide additional updates on subscriber numbers as of the dates of earnings calls.

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From: Joachim K2/12/2021 1:11:33 PM
   of 117
How sneakerheads ruined online shopping

Why shopping — for everything from the PS5 to the Nugget couch — got so competitive.

In the affluent blocks and neighborhoods of cities and suburbs across the country, moms of young children spent the summer and fall of 2020 raging at the impossibility of acquiring the one item that could bring them happiness. They were stuck inside like everyone else, but with difficult-to-please toddlers who had nowhere to play — and the solution to all of their problems, the Nugget couch, was sold out again.

It’s impossible to predict what the hottest toy of the year will be, but in retrospect, it makes sense that this one doubled as furniture. Animal Cracker-addled tyrants — forbidden from local playgrounds due to coronavirus restrictions — could hoist themselves onto the fort-like designs and give parents a few minutes of solace.

Unfortunately, every restock to the direct-to-consumer business’s website sold out within minutes, assuming you were able to even get one in your cart before trying to check out. Moms were left delirious, paying over $500, or more than twice the retail price of the Nugget, on aftermarket platforms such as Facebook Marketplace. “I thought $229 was crazy expensive, so no way I was going over that,” says Pennsylvania mom Jessica DeRafelo. “But I know there’s some crazy Nugget people out there.”

Months earlier in March 2020, as America’s never-ending social-isolation era began, sneaker boutiques across the country were announcing they would no longer hold in-store releases of “hype” sneakers. For the uninitiated, these are the shoes — usually from brands like Jordan, Yeezy, or Nike SB, in collaboration with the latest high-fashion or sought-after streetwear label — for which people camp out and line up, thanks to the manufactured scarcity of each release.

Brands use that scarcity to turn people into animals, forcing them to scramble to grab one of the few pairs and then using that for publicity. But not everyone who secures a pair does so to fill out a personal collection or tie together a knockout fit: These shoes normally sell for a large profit on resale websites like GOAT and StockX.

Large gatherings aren’t especially good for airborne viruses, and the coronavirus has proven consistent with that assessment. As such, shops decided that forcing 50-some-odd people to wait next to each other on a sidewalk for a pair of shoes was bad for both the community and the brand. Hype sneakers are now raffled off or sold on e-commerce platforms, shipped from a centralized warehouse. No more lining up. No more teenagers in $2,000 outfits with mobile speakers listening to Playboi Carti and checking their phone for the latest on that day’s drop from 7 am until noon.

What Nugget-seeking moms didn’t know was that these kids, the ones they would walk by during an errand and scoff at — muttering “All this for some shoes?” or something to that effect — were the reason they themselves could not escape the third ring of hell.

Sneakerheads aren’t the only resellers around, but they had started to expand their business beyond footwear. They’d branched out into hawking other exclusive products that were all being released via e-commerce due to pandemic restrictions. Conveniently, e-commerce was a retail battlefield they’d already had a years-long head start on, gaining a competitive edge over retailers that weren’t used to managing massive product drops. Scarcity is not limited to footwear, and money spends the same. Those $500 Nugget couches weren’t being sold by other moms. They were being hoarded next to Yeezy sneakers and Funko Pop! figurines.

Desperation breeds markets, and both can be manipulated. That’s the basis of the US economy. We spend hours doing things we hate to acquire the things we don’t have time to enjoy. For the vast majority of Americans, there’s no floor beneath us; a living must be earned, never given. It’s impossible to measure what level of underlying damage that does to the psyche, but one way it appears to manifest itself is in competitive retail — the acquisition of stuff that other people can’t get. The reseller’s job is to diagnose that desperation and capitalize on it.

In the sneaker game, this has traditionally meant bribing local boutique owners or making friends to acquire extra pairs of the limited-release sneakers collectors lusted after. However, as major retailers, boutiques, and even Nike (via its immensely popular SNKRS app) began to emphasize e-commerce models for hyped releases, the resellers began to look more like software developers than street kids.

It started as Sneaker Twitter. Developers with an affinity for rare Nikes started to program product-monitor bots, looking to gain an edge on the people who camp out on sidewalks. Boutiques often release a certain portion of their stock online, and to get there first, developers just needed to know when specific product SKUs were loaded and programmed to go on sale. However, sneaker culture is tight-knit, so once they cracked the code, they began sharing it discreetly with people in the know.

Eventually, it spread to Twitter in the form of accounts that would notify followers of drop info. Individual collectors and resellers would congregate in the replies, swap secrets, talk about new bots that were working for them. Within months, casual Twitter interactions became more coordinated, and software development more sophisticated. Automated purchasing bots were created to bypass or expedite certain actions (automatically adding sizes to shopping carts, skipping steps in checkout by completing forms in milliseconds, etc.) during the buying process, allowing for accounts to purchase multiple pairs of shoes (sometimes dozens, at least in the early days), with online stock selling out faster than humanly possible.

Retailers have since invested in first- and third-party protections against bot traffic, analyzing metadata and blacklisting IP addresses with known bot activity. The problem, though, is that every solution they come up with is seen by the developer community as a new challenge — and the race to be the first to find the exploit begins. The allure is obvious: The reseller doesn’t need to actually do anything to make money, besides being fast. There is no product to manufacture, no marketing necessary to create demand. The brands do that for them. All they have to do is get there before the people who actually wanted the sneakers — and wanted them badly enough to pay a multiple on the retail price.

Doug, a reseller in the Pacific Northwest who asked to use a pseudonym for privacy reasons, said he was hooked from the first pair he sold. “Once I saw it was as easy as walking into a store, picking up a pair, and hitting StockX, it was only a couple days before I started thinking, ‘How do I do this at scale?’” he said. “Soon I was hanging out on Sneaker Twitter, learning about automation.”

Doug found himself on the ground floor of the automation boom in sneaker reselling. It wasn’t long before he was invited into a highly selective and exclusive community of people, known in the game as a “cook group.” The group would pool resources and subscribe to the best automation bots in existence, provided by a high-level developer who acted as the organizer. The exclusivity is by design: Though it may limit the developer’s short-term upside to allow only a few hundred people into a cook group, it also reduces the number of times that developer’s bot is used on retail sites, which are constantly trying to detect (and subsequently block) it.

Regardless of the self-imposed revenue ceiling, resellers we spoke with for this story indicated that cook-group owners are assuredly raking in six-figure salaries just for the organization of a group. When slots open up, invitations are competitive to acquire and usually cost a few thousand dollars, and that’s only to gain the privilege of paying a subscription fee that’s normally around $1,000 per year. Assuming a cook group of a few hundred people (a size that’s not only manageable but also pretty standard), these developers can bring in hundreds of thousands of dollars — not accounting for any product they themselves may be acquiring for resale.

And for those grinding through it as full-time resellers — subscribing to cook groups, driving to shops in person to check for stock, always keeping a line to the internet in case a product monitor announces a new drop — six figures is within reach. The only limit is how much stock they can secure. And that’s where frustrated moms trying to get their hands on foam couches that double as forts come in.

As the sneaker resale market becomes more prominent with the launch of companies like StockX, interest has subsequently exploded, flooding the market with new sellers. Allen, a reseller in Los Angeles (and also an alias), said StockX “changed it completely.”

“It’s way easier now,” Allen explained. “I used to always meet people in public at the food court to sell shoes, to be safe. People got scammed all the time.”

“The wealth of knowledge is out there. The secret’s out,” Doug said. “There’s, like, guys on YouTube with public-facing channels showing you how to set this stuff up.”

But with increased access comes more competition for stock and gradually shrinking slices of the pie. The developers and resellers used to making better money started expanding into other categories with manufactured scarcity and cult followings. This meant foam couches that moms across the country were fighting over. Or, trading cards like the ones that are likely sitting in various basements or attics collecting dust. Art prints, collectible figurines. If it has a fanatical following and manufactured scarcity, it’s now a commodity.

“The Nvidia graphics card drop is the first one that was like, ‘oh, wow, okay, this is really spreading,’” Doug says. A recent September drop of the company’s coveted RTX 3080 was raided by resellers, who turned the $699 graphics card — which enhances frame rates and performance for serious gamers and is therefore hotly coveted — around for an average sale of nearly $1,200 on StockX. Walmart and Target checkout bots have also popped up, helping resellers acquire exclusive games or collectible toys from retailers that had never had to deal with the onslaught of automation that Nike and footwear retailers had been developing against. And once 2020’s biggest electronics launch came in the fall, the Sony PlayStation 5, the chum was irresistible.

Sony has sold nearly 5 million units of the PlayStation 5 worldwide to date. According to StockX sales figures as of January 28 of this year, roughly 49,000 and 28,000 units of the Standard and Digital versions of the console have sold on the platform at an average sale of $846 and $789 on the $499 and $399 MSRP, respectively. That’s more than $63 million (at more than 50 percent profit) in the pockets of the people who exploited their way to the front of the line, and 77,000 people desperate enough to pay the ticket.

Since the pandemic and subsequent desire to avoid crowds during a deadly plague has forced all exclusive and high-demand product retail to move to the same e-commerce platforms that resellers have been exploiting, the resale market has exploded, with PS5s only representing one small slice of the expansion. “We keep saying it’s not a pandemic, it’s a bandemic,” says a reseller in Pittsburgh, gratingly adopting “bands” (slang for large sums of money) from the drug-dealing lexicon. Sometimes, even the words are someone else’s.

“I don’t feel guilty about it,” says Doug when asked whether he ever regrets his side gig. “I’m selling luxury items. What I sell, nobody needs, they just want it and they can afford it. There are lines I don’t cross.” For Doug, those lines are drawn at necessities. But there’s always someone willing to hoard the things people need to survive, like cretins who snapped up the hand sanitizer and toilet paper at the start of the pandemic. “What I worry about is like when the vaccine becomes available and people are booking slots online, people botting that and like selling appointment slots,” Doug says. In Chicago, Walgreen’s bots have already been developed.

And why wouldn’t they? There’s someone out there willing to pay, and there’s always the possibility that the bottom could fall out from under any one of us. If brands and retailers who invest millions of dollars in fighting bot automation can’t beat the reseller community, what hope do the neglected state infrastructures that have already botched the vaccine rollout possibly have? There will always be someone desperate or heartless enough to take advantage of even the markets whose consequences are life and death.

Vaccine reselling would get shut down eventually, just like the price-gouging did, either via supply chain fixes or software patches. The UK is even looking to ban automation software, the effectiveness of which seems dubious. But how many will get in before the ban? How many will find a workaround? At the front of the line for the vaccine, there’ll be a kid in clothing and sneakers you don’t recognize that were purchased for more than your monthly income. Behind him wait the rubes, some of them unwitting customers — of a PS5, an autographed piece of memorabilia, a pair of Jordans — all tolerating the indignity of American life, just so long as they can still pay the ticket to get theirs.

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From: Joachim K2/12/2021 1:12:11 PM
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Tim Hortons betting back-to-basics strategy doesn't leave egg on its face as economy reopens

One of Tim Hortons’ top executives was keen to talk about eggs after the chain announced a US$1.2-billion dent in annual sales during the pandemic.

Eggs, said Duncan Fulton, a Tim Hortons spokesman and chief corporate officer at its parent company, Restaurant Brands International Inc., are firmly in the category of things they can control. That focus on “controlling what is within your control” has become something of a corporate mantra lately.

The virus, economic shutdowns, and the mass disappearance of morning routines, commutes and coffee breaks are all outside the company’s control. But eggs are within, as are the beans used for the new dark roast coffee blend and the machines that brew it.

“The egg is the foundation of a breakfast sandwich,” Fulton said in an interview, describing the chain’s recent, tectonic shift from a “multi-ingredient egg omelette” for its breakfast sandwiches to an egg that is cracked and cooked fresh on site. The new eggs, he said, are the most revolutionary thing to happen to Tim Hortons’ breakfast menu “in the history of the brand.”

The fresh-cracked eggs, like the new dark roast blend and brewing machines, are all part of the company’s back-to-basics strategy, which was launched before the pandemic to turn around the chain’s flagging fortunes.

But its fortunes are worse now, as detailed in its annual report released Thursday, and Fulton sees the plan as more important than ever.

Tim Hortons is expecting that billions of consumer dollars currently being spent on cooking at home will come hurtling back to the restaurant sector when the economy reopens, and it wants to be ready to catch more than its pre-pandemic share of that spending.

“The question is, who’s going to be poised to be there as people start re-establishing routines?” Fulton said.

On Thursday, Tim Hortons reported system-wide sales of roughly US$5.5 billion globally in 2020, down about 18 per cent from US$6.7 billion in 2019. But the chain has been gradually clawing back sales for months after taking a major hit at the start of the pandemic.

Same-store sales — a key way of measuring performance in retail — dropped to negative 40 per cent in March 2020, and slowly improved in the months following as the chain ramped up its delivery and drive-thru businesses.

RBI said Tim Hortons’ same store sales improved to negative 11 per cent during its fourth quarter, ended Dec. 31, and locations with drive-thrus sometimes achieved parity.

“Obviously, we’re not doing cartwheels on that, but we are encouraged by the performance and the improvement,” RBI chief executive Jose Cil told investors on a conference call Thursday.

But as stricter lockdown measures came back into force in much of Canada, Cil said same-store sales at Tim Hortons “softened” in January.

“We’ve seen a clear distinction between the nature and impact of these lockdowns in Canada versus the U.S.,” he said.

In the United States, where pandemic restrictions have generally been looser, fast-food sales appeared to have fared better. In its latest quarterly report last fall, Dunkin’ Donuts posted same-store sales growth of 0.9 per cent in the U.S.

In a research note on Thursday, Citibank analyst Sergio Matsumoto noted Tim Hortons lagged McDonald’s, which posted a 7.7-per-cent same-store sales decline in 2020, roughly half of Tim Hortons’ decline.

U.S.-based Burger King and Popeyes Louisiana Chicken, both owned by RBI, also posted relatively stronger results than Tim Hortons.

Burger King’s sales dropped 11.1 per cent in 2020 from the previous year, while sales at Popeyes were up 17.7 per cent, mostly on the strength of its wildly popular chicken sandwich.

Still, RBI’s adjusted earnings per share of 53 cents was 19 per cent below expectations, according to Citibank. Matsumoto said Tim Hortons back-to-basics strategy will be a key factor in determining whether the chain returns to positive sales growth.

The company announced the strategy in January 2020 after months of sagging sales. A previous flurry of increasingly peculiar menu experiments, including an ill-fated line of Beyond Meat sandwiches, had not stopped the slide.

Franchisees complained that the new items confused customers, complicated operations in their tiny kitchens and slowed down average drive-thru times — an important bellwether in the business.

At the start of 2020, Tim Hortons vowed to stop its erratic pursuit of market share at lunch and dinner time, and refocus on its core: coffee, breakfast and baked goods.

Tim Hortons struggling with no sign of customers returning to morning commute

Tim Hortons lays out its path back to normal, hoping to reopen dining areas across Canada by next month

Tim Hortons rolls back Roll Up the Rim prize pool as it makes sweeping changes to contest in digital shift

Tim Hortons overhauls loyalty program after giveaways put a big hole in sales

“We’re pretty optimistic,” Fulton said. “Point number one for optimism is, everything that we were talking about a year ago on the back-to-basic strategy and investing in product quality, you’re seeing roll out now.”

So far, he said, the fresh-cracked eggs are the strategy’s crowning achievement, even though it was a massive organizational shift for the 4,000 stores in Canada, most of which operate under tight timelines in small, modestly appointed kitchens.

The chain rolled out new machines that can cook 12 eggs at a time, with the restaurants now cumulatively cracking 700,000 or so eggs a day.

Ontario Premier Doug Ford is apparently a big fan, complimenting the new egg sandwich as “the best thing you guys ever did” during a news conference earlier this week about the province’s COVID-19 response.

“I can’t think of a single bigger platform improvement in the history of the brand then the move to fresh cracked eggs in the morning,” Fulton said. “We can’t control a global pandemic. We can’t control government orders to lock down at home, but we know what’s going to drive this business consistently for the long term.”

Financial Post

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From: Joachim K2/12/2021 1:12:46 PM
   of 117

Canada approves world’s first bitcoin ETF for retail investors

Purpose Investments Inc. has been cleared by regulators to launch the world’s first bitcoin exchange traded fund, opening the door for retail investors to more easily access a cryptocurrency that had been stalled by regulators for years.

On Thursday, the Ontario Securities Commission (OSC) gave the green light for Purpose Investments, the asset management arm of Purpose Financial LP, to launch the Purpose Bitcoin ETF on the Toronto Stock Exchange. Under the ticker BTCC, the fund will begin to trade on Feb. 18 and invest directly in bitcoin, allowing retail investors to access the cryptocurrency without the need for a digital wallet.

Purpose Financial chief executive officer Som Seif, an ETF veteran, says he and his team had private discussions with the OSC over the past eight months to finalize the launch of the ETF. He said that, since 2017, regulators have become more comfortable with the asset class as institutional investors have adopted cryptocurrencies more widely and there is more infrastructure to support the asset.

“There is a greater recognition that this is an asset class that investors are drawn to whether the regulators like it or not,“ Mr. Seif said. “I think the regulators now recognize that creating an efficient, regulated structure is a much better outcome for investors’ protection than some of the things we have seen in recent years that went unregulated, were either outright fraudulent or left investors paying egregious fees.”

Bitcoin is a digital currency that is not backed by any country’s central bank. Launched in 2009, the cryptocurrency spiked in popularity in 2017 after reaching US$20,000 before plummeting more than 85 per cent in 2018.

A revival brought prices to a new all-time high of US$40,000 at the start of 2021. But the digital currency is known to be highly volatile, with price swings of more than 30 per cent in one day.

Until now, asset managers could give retail investors only closed-ended bitcoin funds -– an investment that typically trades with large premiums, in some cases as much as 40 per cent.

During the bitcoin craze of 2017 and early 2018, Canadian and U.S. ETF companies went head-to-head trying to launch North America’s first bitcoin ETF.

In recent weeks, several ETF providers filed a preliminary prospectus with the OSC in hopes of being the first to market. Horizons ETFs Management (Canada) Inc., Evolve Funds, Accelerate Financial Technologies Inc. and newcomer Arxnovum Investments Inc. have all publicly applied with regulators to list a bitcoin ETF that would also trade on the Toronto Stock Exchange.

In the United States, more than 10 investment companies have filed with the Securities and Exchange Commission (SEC) for similar products. Last month, President Joe Biden appointed a new SEC chair, prompting hopes that a bitcoin ETF could be approved in 2021.

The OSC’s approval of BTCC could nudge other markets to see similar products come to light.

“The SEC will definitely feel the pressure to allow such a product to come to the marketplace because there are already products in the market that are taking advantage of the exposure of bitcoin that are not efficient for investors and are not being done in a regulated format like the SEC would want,” he said.

Bitcoin holdings are kept in “cold storage” – an offline custodian that cannot be hacked. Gemini Trust Company LLC will be sub-custodian for the fund, and CIBC Mellon Global Securities Services Co. will act as fund administrator.

BTCC has a 1 per cent management fee, and will invest in the physical form of bitcoin rather than futures that would allow investors to speculate on the price at a later date. The fund will track the TradeBlock XBX Index, which uses an algorithm to calculate the consolidated price of bitcoin every second.

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From: Joachim K2/12/2021 1:13:20 PM
   of 117
Air Canada earnings: Airline posts 'grim' results but 'very encouraged' by government talks over aid

Xinhua News Agency via Getty Images

Air Canada’s ( AC.TO) chief executive said he is “very encouraged” by ongoing discussions with the federal government over airline-specific financial support, as the company posted financial results for “the bleakest year in the history of commercial aviation.”

The Montreal-based airline reported a net loss of $1.16 billion, or $3.91 per diluted share, in the fourth quarter ending Dec. 31, compared to a profit of $152 million, or 56 cents per diluted share, in 2019, capping a brutal year for the airline industry.

“While undeniably grim, results such as these are being reported the world over in our industry due to the impact of COVID-19 (and) extremely onerous government-imposed travel restrictions, quarantines and advisories,” Air Canada CEO Calin Rovinescu said on a conference call with analysts Friday.

“In Canada, we continue to contend with a patchwork of new and ever-changing travel restrictions that are stifling travel demand, impacting our ability to operate or plan, and even preventing us from formulating reliable financial guidance.”

Despite the challenging environment, Rovinescu struck an optimistic tone when it came to potential financial aid to help the beleaguered sector.

Rovinescu said the airline has held talks with the government on airline-specific financial support over the last several weeks, and that he was “very encouraged by the constructive nature of discussions.” He added that the company chose to reference the negotiations in a statement released Friday because “for the first time, we view that the discussions have gone to a more advanced nature.”

“While there’s no assurances at this stage that we will arrive at a definitive agreement on sector support, I am more optimistic on this front,” he said.

“The discussions have picked up to a pace I would characterize as more of a negotiation that is in line with something that leads to an outcome. I’m more confident that there can be an outcome now than I was say a month ago.”

Rovinescu said that any deal with the government will include a resolution on passenger refunds, a return of regional routes as well as a form of support for the aerospace sector. He also said that reducing the mandatory 14-day quarantine restrictions on international travellers has been part of the discussions the airline has held with the government. Air Canada has pushed Ottawa to remove its quarantine mandate – which Rovinescu said was “unnecessary” and “less effective than rigorous testing and tracing”” – and rely instead on testing protocols.

Ottawa approves Transat takeover

Air Canada’s financial results were released the day after the federal government approved Air Canada’s proposed purchase of Transat, concluding it was the best probable outcome for workers, Canadian travelers and other industries that rely on air transport. Transport Minister Omar Alghabra said in a statement that the deal “will bring greater stability to Canada’s air transport market.”

Air Canada’s chief rival, WestJet Airlines, slammed the government decision late on Thursday, saying the decision shows that Canada is “closed to competition.”

“This decision shows blatant disregard for all Canadians who believe in healthy competition," WestJet chief executive Ed Sims said in a statement, adding that Canadians will face fewer choices and higher fares when travel returns post-COVID-19. He pointed to a Competition Bureau statement that said “eliminating the rivalry between these airlines would result in increased prices, less choice, decreases in service and a significant reduction in travel by Canadians on a variety of routes where their existing networks overlap."

“It is hard to imagine a deal as anti-competitive in any industry where the number one player buys number three without meaningful remedies,” Sims said.

“This is a serious setback to Canada's economy. The Competition Bureau themselves described such cosmetic remedies as inadequate. Canadians should be profoundly disappointed."

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

Download the Yahoo Finance app, available for Appleand Android.

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