Convertibles primary, secondary quiet; LendingTree down outright, up dollar-neutral

By Abigail W. Adams

Portland, Me., Aug. 4 – The convertibles primary and secondary markets were again quiet on Tuesday as Hurricane Isaias’ path of destruction crossed the East Coast.

Trading volume was light as several sources lost power midway through the session.

There was $67 million in reported volume a little over one hour into Tuesday’s session and $317 million in the late afternoon, a market source said.

LendingTree Inc.’s recently priced 0.5% convertible notes due 2025 were down outright but up dollar-neutral as stock sold off following the company’s second-quarter earnings report.

Etsy Inc.’s 0.125% convertible notes due 2026 were active with the notes trading up alongside stock on the eve of the e-commerce company’s second-quarter earnings report.

Nio Inc.’s 4.5% convertible notes due 2024 continued their upward momentum on Tuesday following a better-than-expected July delivery report.

LendingTree’s earnings

LendingTree’s 0.5% convertible notes due 2025 were down outright but up dollar-neutral as stock sold off following the company’s second-quarter earnings report.

The 0.5% notes sank 3 points outright with stock down more than 7%.

They were changing hands around 104 in the late afternoon, according to a market source.

The 0.5% notes expanded 0.5 point to 0.75 point on the move down.

With more than $10 million in reported volume, the notes were among the most actively traded during Tuesday’s session.

LendingTree stock traded to a high of $368.66 and a low of $326.39 before closing the day at $336.88, a decrease of 6.55%.

Stock sold off despite a large second-quarter earnings beat.

The online loan marketplace reported earnings per share of 46 cents versus analyst expectations for losses per share of 4 cents.

Revenue was $184.3 million versus expectations for revenue of $175.38 million.

However, the company reported an operating loss of $7.55 million and net loss of $8.62 in the second quarter after posting operating income of $12.32 million and net income of $13 million at this time last year, InvestorPlace reported.

The 0.5% convertible notes were one of the last deals to price before the primary market went quiet.

LendingTree priced a $500 million issue of the 0.5% convertible notes on July 21.

Etsy active

Etsy’s 0.125% convertible notes due 2026 were active on the eve of the company’s second-quarter earnings report.

The 0.125% notes were up 2.25 points outright to change hands at 161 early in the session, according to a market source.

They came in slightly as stock turned negative in intraday activity and were changing hands around 159.875 in the late afternoon.

The notes saw $7 million in reported volume during Tuesday’s session.

Etsy stock wavered between gains and losses on Tuesday.

Stock traded to a high of $130.08 and a low of $124.61 before closing the day at $129.80, an increase of 2.51%.

With Amazon smashing its earnings estimates as consumers turned to e-commerce companies at the height of the Covid-19 pandemic, analysts are also expecting strong second-quarter results from Etsy.

Nio gains

Nio’s 4.5% convertible notes due 2024 continued their upward momentum on Tuesday after the Shanghai-based electric car manufacturer reported better-than-expected July delivery numbers.

The 4.5% notes traded up to 162.375 with equity up 3% early in Tuesday’s session.

The notes came in as the company’s American Depositary Shares turned negative alongside the broader tech sector in intraday trading.

The 4.5% notes were changing hands around 157.75 in the late afternoon.

The notes were largely moving in line dollar-neutral, a source said.

Nio’s American Depositary Shares were volatile on Tuesday after a 13% surge on Monday.

The shares traded to a high of $14.53 and a low of $13.22 before closing the day at $13.64, an increase of 0.29%.

The convertible notes from the Shanghai-based electric car manufacturer continued to trade near new heights on Tuesday.

They have seen a dramatic rebound in recent months as electric cars gain popularity with consumers.

The notes have been in distressed territory for most of the year and were trading in the 50s as recently as May, according to Trace data.

Mentioned in this article:

Etsy Inc. Nasdaq: ETSY

LendingTree Inc. Nasdaq: TREE

Nio Inc. NYSE: NIO

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