Morning Commentary: WebMD drops back on word it’s not in talks with potential acquirers

By Rebecca Melvin

New York, Jan. 14 – WebMD Health Corp.’s stock and convertible bonds staged a reversal early Thursday, but not of the variety that is whipsawing the broader markets. WebMD’s securities turned lower after the Elmwood Park, N.J.-based provider of online medical information said that it is not in any negotiations to be acquired.

The WebMD announcement Thursday was made in response to news reports proposing the opposite. The Financial Times said that the company was eying a sale to potential pharmaceutical or media companies.

WebMD’s 1.5% convertibles due 2020 fell back to 116.4 to 116.9 at late morning from 121.3 to 126 earlier in the morning, according to Trace data. The convertibles had jumped from 114 to 119 on positive guidance and strong fourth quarter web traffic figures.

WebMD shares were last down $3.60, or 7%, to $49.59 after an earlier 8% pop and on top of a 6% jump on Wednesday despite a sharp sell-off in the broader markets.

Equities were last positive with the S&P 500 stock index up 12.23 points, or 0.7%, to 1,902.54 in the early going, after dropping 48.4 points, or 2.5%, on Wednesday.

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