Morning Commentary: Convertibles market quiet as equities extend losses; Chegg active

By Abigail W. Adams

Portland, Me., Sept. 8 – It was a slow return from the holiday weekend on Tuesday with the convertibles primary and secondary markets quiet as equities extended their losses.

The Dow Jones industrial average was down 552 points, or 1.95%, the S&P 500 down 2.08% and Nasdaq composite down 2.57% shortly before 11 a.m. ET.

Tech companies continued to lead the decline.

While there was $72 million in reported volume about one hour into the session, few names saw concentrated trading activity, a market source said.

Chegg Inc.’s convertible notes remained active with its most recent issue continuing to trade below par.

Chegg’s 0% convertible notes due 2026 were changing hands at 99.25 early in the session with stock off.

The 0.125% convertible notes due 2025 were trading around 140, a source said.

Each tranche saw about $3 million in reported volume. They were the most actively traded issues early in the session.

Chegg stock was again volatile early Tuesday. Stock traded as low as $64.72 soon after the opening bell but quickly erased its losses only to again sink into the red.

Chegg stock was $67.32, a decrease of 1.01%, shortly before 11 a.m. ET.

Chegg’s 0% convertible notes traded in a range of 98 to 100.25 last Friday with stock volatile. It was the first time the new paper, which priced on Aug. 18, traded below par.

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