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Morning Commentary: Coupa Software convertible notes gain on earnings surprise
By Abigail W. Adams
Portland, Me., Sept. 7 – There was an uptick of activity in the convertibles secondary space on Wednesday on a strong start for equity markets.
While equity indexes broke their rout and held onto gains after a green start, “there’s no confidence,” a source said.
The Dow Jones industrial average was up 194 points, or 0.62%, the S&P 500 index was up 0.61%, the Nasdaq Composite index was up 0.45% and the Russell 2000 index was up 0.60% shortly before 11 a.m. ET.
There was $60 million in reported volume about one hour into the session although few names saw concentrated trading activity and there was little movement in the names that did trade.
Coupa Software Inc.’s convertible notes were the “winners of the day,” with the notes making gains on an outright and dollar-neutral basis after a surprise earnings beat.
Coupa’s 0.375% convertible notes due 2026 rose about 2 points outright with stock up more than 10%.
The notes were changing hands at 79.875 early in the session.
Coupa’s 0.125% convertible notes due 2025 also rose 2 points outright.
They were trading at 87.5 early in the session.
The high-premium notes expanded about 0.375 to 0.5 point dollar-neutral on the move, a source said.
Coupa’s stock was seen at $61.88, an increase of 10.95% shortly before 11 a.m. ET.
The software company’s stock surged as earnings bested expectations. Coupa reported earnings per share of 20 cents versus analyst expectations for earnings of 9 cents.
Revenue was $211.1 million versus analyst expectations for revenue of $203.99 million.
There is speculation the company would be a good takeover target, a source said.
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