Morning Commentary: Convertible valuations steady; Momo quiet despite higher shares

By Rebecca Melvin

New York, Aug. 27 – The convertibles market was quiet early Tuesday despite another up move in U.S. stocks. But convertible valuations were steady, a New York-based market source said.

Momo Inc.’s convertibles were quiet although the American Depositary Shares of the Beijing-based mobile social networking platform in China were moving higher on better-than-expected second-quarter results.

Momo reported non-GAAP earnings per share of 49 cents for the second quarter, which was a little lower year over year, but on revenue that was 32% higher, according to Momo’s unaudited financial results.

The Momo 1.25% convertible notes due 2025 were last seen in trade at 91.625, according to Trace data. Shares closed on Monday at $32.73, but they began to climb at the market open in New York and had been up 7.1% at $35.05 in the early going.

Tesla Inc.’s convertibles continued to trade as shares edged up a little further. But there was no trading that was described as interesting early Tuesday, and there were no new issues announced or priced.

“It’s kind of dead,” the market source said.

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