Morning Commentary: Fiverr prices, skyrockets on debut; Cytokinetics active, stock tanks

By Abigail W. Adams

Portland, Me., Oct. 8 – The convertibles secondary market opened Thursday with the first new paper in almost two weeks entering the space.

Fiverr International Ltd. priced $400 million of five-year convertible notes after the market close on Wednesday.

The new paper was in focus and skyrocketed on debut.

Outside of the new paper, the secondary space was active as equities extended their gains from Wednesday’s session on lingering optimism over a targeted stimulus bill.

There was $200 million on the tape about one hour into Thursday’s session.

While Fiverr accounted for nearly half of the trading volume, equity-sensitive convertible notes were also trading in volume early in the session.

While volume was comparatively light, Cytokinetics Inc.’s 4% convertible notes due 2026 saw some activity as stock plummeted almost 50% following disappointing results from a clinical trial.

Fiverr shoots higher

Fiverr priced $400 million of five-year convertible notes after the market close on Wednesday at par with a coupon of 0% and an initial conversion premium of 40%.

Pricing came in line with revised price talk for a fixed coupon of 0% and an initial conversion premium of 40%, according to a market source.

Initial price talk was for a fixed coupon of 0% and an initial conversion premium of 25% to 30%.

The deal from the Israeli-based online marketplace for freelance services was in demand during bookbuilding.

The demand followed the notes into the secondary space with the new paper skyrocketing on an outright and dollar-neutral basis.

The notes traded as high as 104.5 on an outright basis with the majority of trades between 103 and 104, according to a market source.

The notes expanded upwards of 4 points dollar-neutral.

There was about $100 million on the tape one hour into Thursday’s session.

Fiverr’s stock was flat to down early Thursday and was changing hands at $151.70, a decrease of 0.77%, shortly before 11 a.m. ET.

Cytokinetics trades

While volume was comparatively light, Cytokinetics’ 4% convertible notes due 2026, a small issue that rarely trades, saw some activity early Thursday as stock plummeted.

The 4% convertible notes dropped almost 100 points outright with stock nearly cut in half.

The notes were changing hands at 177 with about $3 million in reported volume, a source said.

Cytokinetics’ stock traded down to $15.56, a decrease of 43.93%, shortly before 11 a.m. ET.

Stock plummeted after the biopharmaceutical company announced disappointing results from a joint clinical trial with Amgen about an experimental heart drug.

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