Morning Commentary: Nutanix ‘explodes’ on buyout rumors, convertibles jump 12 points

By Abigail W. Adams

Portland, Me., Oct. 14 – It was a relatively quiet morning in the convertibles secondary space as volatility continued to whipsaw equities with the exception of one name – Nutanix Inc.

Nutanix’s 0.25% convertible notes due 2027 dominated the tape with the notes “exploding” following takeover reports.

The 0.25% convertible notes jumped 12 points outright to trade up to 88.125 early in the session, a source said.

There was $23 million of bond trading on the tape.

Nutanix’s stock jumped 25% on the news to trade at $26.38 shortly before 11 a.m. ET.

The notes were mostly held by outright accounts, a source said.

Nutanix’s stock and convertible notes skyrocketed following a Wall Street Journal report the cloud-computing company was exploring a potential sale to a private-equity firm.

Outside of Nutanix, volume was thin as equity indexes again moved between large gains and losses.

While the market opened the day strong, indexes quickly turned negative with the Dow Jones industrial average down 127 points, or 0.41%, the S&P 500 index down 1.12%, the Nasdaq Composite index down 1.58% and the Russell 2000 index was down 1.18% shortly before 11 a.m. ET.

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