Morning Commentary: Monster up after pricing at cheap end; SanDisk slips with shares after earnings

By Rebecca Melvin

New York, Oct. 17 – Monster Worldwide Inc.’s newly priced 3.5% convertibles were heard at 103.5 in the early going on Friday versus an underlying share price of $4.02, after the New York-based employment services company priced $125 million of five-year senior notes at the cheap end and beyond the cheap end of talk, according to a New York-based trader.

Monster shares sagged a little further early on after sliding 18% on Thursday.

Early trading was active as the equity market came rushing back from steep losses, with the Dow Jones industrial average up more than 260 points, or 1.6%, snapping a six-day losing streak.

The CBOE Volatility index dropped back to 20.76, which was down 18%.

Also in focus were SanDisk Corp.’s convertibles after the Milpitas, Calif.-based data storage company reported better-than-expected earnings but lower than-expected revenue and warned that current quarter revenue would be lower than expected.

SanDisk’s 1.5% convertibles due 2017 slipped to 168 to 169 from 170 to 173 on Thursday.

SanDisk shares were down 84 cents, or 1%, at $84.47.

The company said that fourth-quarter revenue would be below analysts’ estimates due to supply constraints.

SanDisk forecast revenue of $1.80 billion to $1.85 billion for the fourth quarter ending December. Analysts on average were expecting $1.88 billion.

Excluding non-recurring items, SanDisk earned $1.45 per share and revenue rose 7% to $1.75 billion.

Analysts had expected a profit of $1.33 per share and revenue of $1.77 billion.

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