Wednesday morning brought new highs for the stock market, as investors continued to believe that improved conditions for the global economy are right around the corner. The naming of Christine Lagarde to take Mario Draghi's place as head of the European Central Bank brought new optimism for Europe's struggling economy. As of 11:15 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 95 points, to 26,882. The S&P 500 (SNPINDEX:^GSPC) gained 14 points, to 2,987, and the Nasdaq Composite (NASDAQINDEX:^IXIC) was higher by 45 points, to 8,154.
In North America, a couple of high-profile news items had major implications for the companies involved. Tesla (NASDAQ:TSLA) got good news on the delivery front, validating CEO Elon Musk's assertions about the electric-vehicle specialist being able to meet its goals. On the other hand, the surprise departure of Canopy Growth (NYSE:CGC) co-CEO Bruce Linton shocked many cannabis investors, even though the stock's response to the change in the executive suite was surprisingly muted.
Making the delivery
Shares of Tesla climbed more than 6% Wednesday morning following the release of second-quarter production and delivery information from the carmaker. The company successfully delivered 95,200 vehicles during the period, setting a new quarterly record and reassuring those who had feared that ongoing logistical challenges might cause a disappointing set of numbers.
The gain in deliveries came entirely from skyrocketing movement of the mass-market Model 3 sedan. Tesla delivered 77,550 Model 3s during the period, which was more than quadruple the roughly 18,450 cars it delivered in the second quarter of 2018.
Elsewhere, some Tesla watchers were troubled by the fact that upscale Model S and Model X vehicles once again saw substantial year-over-year declines. Deliveries of the two higher-end models were down more than 20%, to 17,650. However, Tesla managed to get more of these vehicles to customers than they did during the first quarter of 2019, with sequential growth coming in at 46%.
Even more encouraging for Tesla shareholders is the fact that even with higher delivery numbers, backlog for outstanding orders grew. That signals that demand for the vehicles remains high, and most of those following Tesla expect that the company should be able to meet the target of 360,000 to 400,000 vehicle deliveries for the full 2019 year.
Canopy makes a big move
Shares of Canopy Growth were unchanged Wednesday morning as they recovered from losses of as much as 5% earlier in the session. The move followed news that Bruce Linton would step down from Canopy's board of directors and give up his co-CEO title.
Canopy tried to position the transition as a necessary step in the cannabis company's evolution. As Linton said in the press release announcing the move: "Creating Canopy Growth began with an abandoned chocolate factory and a vision. The board [of directors] decided today, and I agreed, my turn is over." Yet in interviews following the announcement, Linton said that the decision to terminate his employment wasn't voluntary.
Mark Zekulin, who was co-CEO with Linton, will remain in the role during a transition phase. Yet Zekulin acknowledges his own eventual destiny, saying that, "I personally remain committed to a successful transition over the coming year as we begin a process to identify new leadership that will drive our collective vision forward."
Going forward, Canopy will find out just how important individual personalities are to the budding cannabis industry. Linton earned substantial respect for his achievements at Canopy, and his leadership likely opened doors where other executives wouldn't have been able to succeed. Shareholders seem convinced that the co-CEO's ouster won't hurt the company, but it's far from certain that Canopy will find a new leader who can match what Linton accomplished.