Morning Commentary: Tesla again eyed as stock remains in retreat; market still quiet

By Stephanie N. Rotondo

Seattle, July 6 – A convertible bond trader said “Tesla [Inc.] is the only thing trading” early Thursday, continuing the trend seen on Wednesday.

The trader added that the automaker’s 1.2% convertible notes due 2021 and 0.25% convertible notes due 2019 were “lower on an absolute basis with the stock, but better on swap.”

He pegged the 0.25% notes at 107.75 against a stock price of $317. He also saw the 1.25% convertibles at 107.25.

As for the underlying equity (Nasdaq: TSLA), it was off nearly 5% at mid-morning. The equity has dropped about 12% for the week.

The name has been in focus for the last few days, as investors digested second-quarter delivery results that failed to meet expectations.

Tesla reported Monday that it delivered 22,000 cars during the quarter although analysts had projected deliveries of 24,200. Additionally, there was news that Volvo and BMW are hoping to gain market share in the electric car space and reports that bring the safety of Tesla’s Model S into question.

Away from Tesla, trading in convertibles remained limited as market players opted to take the holiday week off entirely, sources reported.

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