Morning Commentary: BeautyHealth convertibles in focus in early trading, jump outright

By Abigail W. Adams

Portland, Me., Feb. 23 – It was another quiet morning in the convertibles secondary space with equities volatile as the Ukraine prepares for war.

After launching the day in positive territory, indexes turned negative shortly into the session.

The Dow Jones industrial average was down 56 points, or 0.16%, the S&P 500 index was down 0.27%, the Nasdaq Composite was down 0.55% and the Russell 2000 index was down 0.06% shortly before 11 a.m. ET.

There was $65 million in reported trading volume about one hour into the session with Beauty Health Co.’s (BeautyHealth) 1.25% convertible notes due 2026 dominating the tape.

While a heavy day for the market, BeautyHealth’s 1.25% convertible notes jumped alongside stock after a large earnings beat.

The 1.25% notes rose almost 8 points outright with stock up almost 35%.

They were changing hands at 91.5 versus a stock price of $16.60 early in the session, a source said.

BeautyHealth’s stock was trading at $17.34, an increase of 35.51%, shortly before 11 a.m. ET.

There was $11 million in reported volume.

Stock jumped following the Long Beach, Calif.-based skin care solutions company’s fourth-quarter earnings report.

The company surprised analysts with per-share earnings of 1 cent, versus expectations for no earnings, and revenue of $77.89 million versus expectations for revenue of $70.90 million.

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