Morning Commentary: Teladoc convertible notes the ‘disaster du jour’ amid volatility

By Abigail W. Adams

Portland, Me., April 28 – It was another turbulent morning for equity markets with a strong open giving way to selling pressure as investors digest the latest slew of earnings reports and a surprise contraction in the U.S. GDP.

Indexes opened with strong gains as Meta Platforms Inc. (formerly Facebook) stock surged following earnings but quickly gave them back and were mixed shortly before 11 a.m. ET.

The Dow Jones industrial average was up 71 points, or 0.22%, the S&P 500 index was up 0.54%, and the Nasdaq Composite index was up 0.48% shortly before 11 a.m. ET.

However, the Russell 2000 index was down 0.66%.

Teladoc Health Inc. was the disaster du jour of Thursday’s session with the convertible notes tanking outright as stock got cut in half following earnings.

Teladoc’s 0.875% convertible notes due 2025 fell 11 points outright with stock off more than 48% early in the session.

The convertible notes were changing hands at 83.625 versus a stock price of $29.93 early in the session, according to a market source.

There was $15 million in reported volume.

Teladoc’s 1.25% convertible notes were down almost 7 points outright.

They were changing hands at 73.25 versus a stock price of $29.82 early Thursday.

There was $4 million in reported volume.

Teladoc’s stock was trading at $28.96, a decrease of 48.27%, shortly before 11 a.m. ET.

Stock cratered after the virtual health care company reported mixed earnings and cut its forward guidance.

Teladoc reported losses per share of 44 cents versus analyst expectations for losses of 52 cents.

Revenue was $565.35 million versus the $569.70 million expected.

While first-quarter losses were narrower than expected, stock cratered as the company cut its forward guidance.

Full-year revenue is now expected to be $2.4 billion to $2.5 billion versus the previously projected $2.55 billion to $2.65 billion.

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