Bidding war

Markets: Canada’s main stock index fell yesterday after hitting a record high the previous session, as bombings in the Gulf rattled investors and Shopify shares dropped 3% after the company announced share buybacks.

Dangling a juicy submarine contract, Canada is saying jump, and South Korea and Germany are asking ‘how high?’

What happened: A South Korean envoy let slip to CTV News that, as part of its bid to provide the Canadian military with 12 new submarines, Hanwha proposed Project Beaver — a joint venture with Hyundai to build a hydrogen transport trucking industry in Canada.

Catch-up: Hanwha and Germany’s TKMS, the other candidate to win the sub contract, have been pulling out all the stops to win the lucrative deal — especially since the feds extended the bidding process earlier this year to see what else the two sides had to offer. 

Zoom out: With Project Beaver (we really can’t believe they called it that), Hanwha has upped the ante by offering to bring an entire industry to Canada, and in a sector that’s in a serious slump right now as Canada struggles with EV plant closures and U.S. tariffs. 

Why it matters: Hanwha and TKMS are fighting hard for a reason: the deal could end up being worth $120 billion over a 70-year period. This scope makes it the first truly big deal of Canada’s new era of increased defence spending; it’s crucial Ottawa makes the most beneficial choice. We’ll likely find out who the victor is at the end of June, so buckle in.—QH

The U.S. is readying a new 10% global tariff that will impact Canada. The Trump administration has proposed a new tariff on dozens of countries, including Canada, alleging that they have failed to curb imports of products made with forced labour. Prime Minister Mark Carney said that the levy had been expected for months, and that Ottawa will soon pass legislation to strengthen forced labour protections in supply chains. All CUSMA-compliant goods would be exempt from the 10% tariff, which will still have to go through consultations in July before being implemented. (Associated Press)

Ottawa backs off of its new Cancon rules for streamers. The federal government has ordered the Canadian Radio-television and Telecommunications Commission (CRTC) to review its controversial policy that would force foreign streamers like Netflix to spend 15% of their Canadian revenue on local content. The legislation was expected to be a major source of friction in upcoming U.S. trade negotiations, while streaming companies argued that the new rules would simply force them to raise prices for Canadian customers. (Bloomberg News)

Meta now has an AI agent for businesses. The social media company has started selling a new enterprise AI agent, which is mainly designed to chat with a business’s customers over Instagram, WhatsApp, and Facebook. Eventually, Meta says the tool will be able to complete tasks autonomously, like market research and managing calendars. The company has been racking up a hefty bill from its AI investments and is looking for new sources of revenue (outside of its $240 billion a year ad business) to offset those costs. (Reuters)

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Scientists flipped the switch yesterday on the world’s most powerful privately owned laser. Luckily, it doesn’t belong to a Bond villain trying to melt the world’s ice sheets; it belongs to Xcimer Energy, a startup pursuing commercially viable nuclear fusion power. Their plan: fire lasers at fuel pellets until their deuterium and tritium atoms fuse, releasing bursts of energy.  

Why it matters: Nuclear fusion has long been a white whale for scientists, promising energy that’s powerful, abundant, and carbon-free. The laser method might sound like sci-fi, but it shows promise. Though the founders of the company say the system must become “dramatically simpler, cheaper, and more manufacturable” before widespread adoption.

A man made famous for his short bets is now staring down his longest position ever: over two decades behind bars. 

Driving the news: Prominent investor and activist short seller Andrew Left was found guilty this week of operating a securities fraud scheme, a conviction that comes with a maximum sentence of 25 years in prison.

Why it matters: Left’s conviction is a warning shot at the bad actors running dressed-up pump-and-dump schemes online, a type of fraud that has grown in lockstep with social media. 

Yes, but: Short selling can actually be a valuable part of keeping markets honest by exposing overvalued companies and blowing the whistle on fraud (Enron is one of the more prominent examples of a company targeted by short sellers that turned out to be a house of cards). Some experts argue that Left’s conviction will scare away the few short sellers who are still willing to call out companies publicly.—LA

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