Envestnet convertibles in focus; Ford active; Guidewire, DocuSign gain post-earnings

By Abigail W. Adams

Portland, Me., June 4 – The convertible bond secondary space closed the holiday-shortened week as it started it – quietly.

With no new paper entering the space, stock movements caused by company news and earnings reports were the driving force of trading activity.

There was $76 million in reported trading volume a little over one hour into Friday’s session and $381 million on the tape by the late afternoon.

Several off-the-run names were active during Friday’s session.

Envestnet Inc.’s 1.75% convertible notes due 2023 were in focus with the notes making large gains on an outright basis as stock soared on news it would be added to the S&P MidCap 400 index.

Guidewire Software Inc.’s 1.25% convertible notes due 2025 improved on an outright and dollar-neutral basis on the heels of its earnings report.

DocuSign Inc.’s 0% convertible notes due 2024 were also improved outright as stock rocketed higher following a large earnings beat.

Ford Motor Co.’s 0% convertible notes due 2026 were active as stock again set a new 52-week high during Friday’s session.

Envestnet in focus

Envestnet’s 1.75% convertible notes due 2023 were in focus on Friday with the notes making large gains on an outright basis.

The notes rose more than 5.75 points outright with stock up over 10%.

The convertibles were changing hands at 126.125 versus an equity price of $77.86 early in the session, according to a market source.

They rose to 127.25 by the late afternoon.

The notes were among the most actively traded on Friday with $12 million in reported volume.

Envestnet’s stock traded to a low of $77.39 and a high of $80.13 before closing the day at $79.40, an increase of 10.96%.

Stock soared on Friday on news the wealth management technology company would be added to the S&P MidCap 400 index on June 9.

Guidewire gains

Guidewire’s 1.25% convertible notes were active and posting gains on Friday on the heels of the company’s earnings report.

The notes, which rarely trade, rose about 1 point outright to trade around 113.

The notes expanded upwards of 0.25 point dollar-neutral, a source said.

Guidewire’s stock traded to a low of $101.61 and a high of $105.81 before closing the day at $104.28, an increase of 2.89%.

The software company’s stock continued to post gains on Friday as the tech sector recouped its losses from the previous session with the Nasdaq Composite closing the day up 1.47%.

Guidewire’s stock has been on an upward trend since reporting earnings prior to the market open on Thursday.

Guidewire reported a loss per share of 16 cents versus analyst expectations for a loss per share of 24 cents.

Revenue was $164 million, which beat expectations for revenue of $158 million.

DocuSign’s earnings

While volume in the name was light, DocuSign’s 0% convertible notes due 2024 were posting gains on an outright basis as stock rocketed higher on Friday following a large earnings beat.

The 0% notes rose about 3 points outright to 99 as stock shot up almost 20%.

While on the rise on an outright basis, the notes, which move on a light delta, were unchanged dollar-neutral, a source said.

DocuSign’s stock traded to a low of $209.94 and a high of $234.89 before closing the day at $233.24, an increase of 19.76%.

The electronic signatures company reported earnings per share of 44 cents, which trampled analyst expectations for earnings per share of 28 cents.

Revenue was $469.1 million versus analyst expectations for revenue of $437.6 million.

The company also reported upbeat guidance with revenue for the fiscal year expected to be $2.03 billion to $2.04 billion versus analyst expectations for revenue of $1.99 billion.

While DocuSign’s stock surged following earnings, it is still a far cry from the company’s stock price at the time of the pricing of the 0% convertible notes.

DocuSign’s stock was $262.65 when the 0% convertible notes priced in mid-January.

DocuSign’s stock has been particularly vulnerable to the pullback in the tech sector.

Stock fell 3% heading into its earnings report on Thursday as the Nasdaq fell over 1%.

Ford active

Ford’s 0% convertible notes due 2026 were the most actively traded issue during Friday’s session.

The 0% notes traded up to fresh heights on an outright basis.

They traded north of 116 during Friday’s session before leveling off around 115.625.

While the 0% notes continued to rise outright, they were largely unchanged dollar-neutral, a source said.

Ford’s stock set a fresh 52-week high early in Friday’s session.

There was more than $20 million in reported volume.

Stock traded to a new 52-week high of $16.46 early Friday and a low of $15.80 before closing the day at $15.97, a decrease of 0.13%.

Stock continued its upward momentum after JPMorgan analysts boosted their price target on the stock to $18.00.

Ford’s stock has been on a tear since it unveiled its electric vehicle ambitions the previous week.

Mentioned in this article:

DocuSign Inc. Nasdaq: DOCU

Envestnet Inc. NYSE: ENV

Ford Motor Co. NYSE: F

Guidewire Software Inc. NYSE: GWRE

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