Morning Commentary: Twitter convertible notes trade mixed as buyout agreement nears

By Abigail W. Adams

Portland, Me., April 25 – It was a quiet start to the day in the convertibles secondary space on another brutal day for equity markets.

Indexes were again deep in the red early Monday with the Dow Jones industrial average down 375 points, or 0.95%, the S&P 500 index down 1.18%, and the Russell 2000 index down 1.42% shortly before 11 a.m. ET.

While the Nasdaq Composite index briefly entered positive territory, it again turned negative and was down 0.28%, shortly before 11 a.m. ET.

There was $60 million in reported volume more than one hour into Monday’s session with Twitter Inc.’s convertible notes continuing to dominate the tape.

In the latest surprise development in Tesla Inc. CEO Elon Musk’s surprise hostile takeover bid for the company, Twitter’s board was heard to be zeroing in on a deal with Musk.

While Twitter’s high-premium 0% convertible notes due 2026 made large gains on the news, the social media company’s more balanced 0.25% convertible notes due 2024 were weaker.

The 0% convertible notes rose 4 points outright.

They were changing hands at 95.5 versus a stock price of $50.63 early in the session.

Twitter’s 0.25% convertible notes due 2024 were down about 1 point outright.

They were changing hands at 110.125 versus a stock price of $50.63.

Twitter’s stock was trading at $50.40, an increase of 3%, shortly before 11 a.m. ET.

A finalized deal between Twitter and Musk could be announced on Monday, the Wall Street Journal and Bloomberg reported.

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