Novocure, Lyft, Jazz Pharmaceuticals jump as ballot counts continue past Election Day

By Rebecca Melvin

New York, Nov. 4 – Gains in the equities markets buoyed convertibles on Wednesday with a number of names trading on strong volume as election results for U.S. president and a number of Senate seats remained too close to call in several key states.

Novocure Ltd.’s 0% convertibles due 2025 extended gains on Wednesday a day after the $500 million deal debuted in the market and traded well. The new paper lifted another 2 or 3 points and was seen at 105.5 bid, 105.75 offered last on a $8.12, or 7%, gain in the underlying stock to $121.95. After hours, the stock added another 20 cents, putting it back to its level prior to the launch and pricing of the new convertible.

Lyft Inc.’s convertibles gained with a surge higher in the underlying shares after California voters approved a measure on their Election Day ballot that allows ride-hailing companies to classify their drivers as independent contractors instead of employees.

Lyft’s shares jumped 21% at the open and closed higher by $2.96, or 11.3%, at $29.19. Lyft’s 1.5% notes due 2025, issued in May, gained in line and in heavy volume. Early in the session the issue was the bond with the highest trading volume on Trace data. But by the end of the session it had been surpassed by the convertibles of Novocure and Solaredge Technologies Inc.

Jazz Pharmaceuticals plc’s 2% exchangeable notes due 2026 also jumped on Wednesday and added 4.5 points on a 5.8% move higher in the underlying shares a day after posting positive earnings.

But Solaredge edged lower in active trade a day after the company’s disappointing third-quarter report, in which sales came in below expectations and fourth-quarter sales were guided below estimates.

Not surprisingly, the convertibles primary market was silent again as uncertainty still hangs over the U.S. election. But the pace of issuance had slowed prior to this week compared to its torrid pace earlier this year.

“It’s slowed down in the last couple of weeks,” a market source said of the primary market. “It’s a lot drier than I expected it to be.”

Secondary market volume has been fairly steady, however, the source said. “It’s a little bit lighter, but not by that much.”

Novocure extends gains

Novocure’s 0% convertibles due 2025 extended gains on Wednesday a day after the $500 million deal debuted and traded well in the aftermarket. The new paper lifted another 2 or 3 points and was seen at 105.5 bid, 105.75 offered last on a $8.12, or 7%, gain in the underlying stock to $121.95.

The convertibles were the session’s top-trading name, according to Trace data. About $42.1 million of the bonds changed hands on the day.

The health care oncology company has recouped share price losses sustained in response to news that it was issuing a convertible bond.

Lyft jumps 6 points

The Lyft 1.5% convertibles due 2025 jumped more than 6 points to 108.92, according to Trace data. The move came amid a spiral for the underlying shares.

Proposition 22, the measure approved on Election Day, exempts Lyft drivers from Assembly Bill 5, a state labor law passed in 2019, which means that it doesn’t have to pay a minimum wage or provide unemployment benefits and health insurance. About 6.6 million California votes, or 58%, of the total, were cast in favor of Proposition 22.

Smooth climb for Jazz

Jazz’s 2% exchangeables due 2026 climbed to 126.667, a 4.6-point rise, as shares added $8.68, or 5.8%, to $157.33 on the day.

The Dublin-based biopharma beat Wall Street’s expectations with its third-quarter results that showed an increase in oncology-product sales.

It reported adjusted net income of $242.1 million, or $4.31 a share, up from $235.3 million, or $4.10 a share, a year earlier. That was better than a consensus estimate of $4.03 per share.

Revenue increased 12% to $600.9 million, which was better than an estimate that expected the company to report $574 million of revenue.

The company also raised its 2020 guidance to a range of $12.20 to $13.00 a share for earnings compared with earlier guidance of $11.90 to $13.00 a share. It is also now forecasting revenue of $2.32 billion to $2.38 billion, up from earlier guidance of $2.22 billion to $2.33 billion.

Solaredge edges lower

Solaredge’s 0% notes due 2025 slipped about a point to 108.5ish with the stock closing only just in the green following a 24% drop on Tuesday.

Solaredge shares close at $206.56 on Wednesday, which was up 19 cents on the day.

The share plunge resulted after the company posted third-quarter earnings that were in line with expectations but guided fourth-quarter earnings below estimates.

The company’s revenue guidance range of $345 million to $365 million was short of the $393 million expected prior to its earnings release. At the midpoint of guidance, fourth-quarter revenues are expected to decline by over 15% year over year from the year-earlier fourth quarter’s $418.2 million.

The Freemont, Calif.-based maker of power optimizers, solar inverters and solar monitoring systems priced its $550 million convertibles deal in September.

Mentioned in this article:

Jazz Pharmaceuticals Inc. Nasdaq: JAZZ

Lyft Inc. Nasdaq: LYFT

Novocure Ltd. Nasdaq: NVCR

Solaredge Technologies Inc. Nasdaq: SEDG

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