Fiverr convertibles skyrocket on debut; Cytokinetics expands as stock tanks; ON active

By Abigail W. Adams

Portland, Me., Oct. 8 – The convertibles secondary market saw the first new paper in almost two weeks enter the space on Thursday.

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

The deal was in demand during bookbuilding and skyrocketed on its secondary market debut.

Primary market activity is expected to remain muted for the next week with companies in earnings season blackout.

However, sources expect a “deluge” of new deals prior to the November election with the pipeline packed.

Meanwhile, outside of the new paper, the secondary space was active as equities extended their gains from Wednesday’s session.

There was $100 million on the tape about one hour into Thursday’s session and $540 million heading into the market close.

While Fiverr’s new convertible notes were active, not all of the trades were appearing on Trace, which was skewing the trading volume, sources said.

Equity-sensitive convertible notes saw high volume on Thursday.

ON Semiconductor Corp.’s 1.625% convertible notes due 2023 were making gains alongside stock following news an activist investor had taken a stake in the company.

Cytokinetics Inc.’s 4% convertible notes due 2026 plummeted on an outright basis as stock was nearly cut in half following disappointing results from a clinical trial.

However, the notes expanded dollar-neutral on the move down.

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 with price talk tightening twice.

“When was the last time you saw a deal with a 0% coupon repricing twice,” a source said.

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

The 0% notes traded as high as 104.5 out of the gate.

They continued to trade around 104 in the late afternoon.

The notes expanded 3.5 to 3.75 points dollar-neutral, a source said.

Fiverr’s stock traded to a high of $156.24 and a low of $151.31 before closing the day at $155.24, an increase of 1.76%.

ON Semiconductors active

ON Semiconductor’s 1.625% convertible notes due 2023 were active on Thursday and making gains alongside stock.

The 1.625% notes jumped more than 5 points outright with stock up 10%.

They were changing hands at 145 in the late afternoon versus a stock price of $25.74.

The bonds saw about $22 million in reported volume heading into the market close.

ON Semiconductor’s soon-to-mature 1% convertible notes due Dec. 1, 2020 were also active.

The notes jumped 12 points outright to 139.25.

There was about $10 million in reported volume during Thursday’s session.

On Semiconductor stock traded to a high of $26.06 and a low of $24.90 before closing the day at $26.04, an increase of 11.52%.

Stock skyrocketed following news activist investor Starboard Value had taken a stake in the company, which it sees poised for growth, Motley Fool reported.

Cytokinetics expands

Cytokinetics’ 4% convertible notes due 2026, a small issue that rarely trades, was active on Thursday as stock plummeted.

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

The notes were changing hands at 177 early in the session.

They continued to trade off and were seen changing hands at 169.5 versus a stock price of $15.69 in the late afternoon.

While the dollar-price of the notes plummeted, they were expanding on the move down.

The notes pushed out about 3 points dollar-neutral, a source said.

There was more than $10 million in reported volume during Thursday’s session.

Cytokinetics’ stock traded to a high of $17.73 and a low of $15.16 before closing the day at $16, a decrease of 42.14%.

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

Mentioned in this article:

Cytokinetics Inc. Nasdaq: CYTK

Fiverr International Ltd. NYSE: FVRR

ON Semiconductor Corp. Nasdaq: ON

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.