Morning Commentary: NetSuite convertibles up on Oracle takeover news; Blucora retreats

By Stephanie N. Rotondo

Seattle, July 28 – Another round of takeover and earnings news was helping to push around convertible bonds on Thursday.

A trader said NetSuite Inc.’s 0.25% convertible notes due 2018 were on the rise after it was announced that Oracle Corp. was buying the cloud software provider for $9.3 billion.

The trader placed the issue at 109. The stock (NYSE: N) was up $16.46, or 17.98%, at $108.03 in early trading.

Oracle is paying $109 per share for the company. That represents a 19% premium over Wednesday’s closing share price.

Meanwhile, Blucora Inc.’s 4.25% convertible notes due 2019 “kind of moved down on delta,” a trader said, as the stock was “tanking” post-earnings.

He said the bonds moved down to 92 from 94 previously. As for the equity (Nasdaq: BCOR), it was off $2.88, or 22.17%, at $10.11.

The company saw its net income rise to $23.42 million, or 55 cents per share, from $14.57 million, or 35 cents per share, the year before. Revenues for the second quarter improved 7.5% to $120.11 million.

However, a trader said the stock’s reaction was due to the company missing revenue expectations.

“I don’t think this effects the credit at all,” the trader said.

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