Convertibles secondary quiet; Insulet adds; Pinduoduo active; MongoDB drops to par

By Abigail W. Adams

Portland, Me., Nov. 7 – It was a slow start to the week in the convertibles secondary space as equity markets struggled to find direction ahead of Tuesday’s midterm elections and fresh inflation data out later in the week.

Equity indexes wavered between gains and losses early in the session but closed the day as they opened, firmly in the green.

The Dow Jones industrial average closed Monday up 424 points, or 1.31%, the S&P 500 index closed up 0.96%, the Nasdaq Composite index closed up 0.85% and the Russell 2000 index closed up 0.55%.

However, few were making moves in the convertibles secondary space with $250 million in reported volume by the late afternoon.

Pinduoduo Inc.’s 0% convertible notes due 2025 improved in active trading with buyers again taking an interest in the notes.

While activity in the name tempered, Insulet Corp.’s 0.375% convertible notes due 2026 continued to add on a dollar-neutral basis following last Friday’s earnings-induced stock surge.

Opendoor Technologies Inc.’s 0.25% convertible notes due 2026 saw a large dollar-neutral contraction as stock continued its free-fall.

MongoDB Inc.’s 0.25% convertible notes due 2026 hit their lowest outright level since March 2020 as stock continued its strong downtrend.

Pinduoduo active

Pinduoduo’s 0% convertible notes due 2025 improved in active trading with buyers again taking an interest in the notes.

The 0% notes traded up 0.375 point outright to 91.375 in the late afternoon, according to a market source.

The notes have long traded for their yield, which was north of 9% on Wednesday.

They are putable at par on Dec. 1, 2023.

There was $10 million in reported volume.

Buyers were again taking an interest in the name.

The ADR space has been eyed in recent sessions as the market speculates that Beijing is on the verge of rolling back its zero Covid policy and reopening its economy.

Insulet adds

While activity in the name tempered, Insulet’s 0.375% convertible notes continued to gain on a dollar-neutral basis following last Friday’s stock surge.

The 0.375% notes traded as high as 149 early in the session with stock in the green.

However, the notes returned to 147 as stock gave back some of its gains from Friday’s session.

While unchanged outright, the notes continued to add dollar-neutral.

The notes expanded 0.5 point on hedge, a source said.

Insulet’s stock traded to a low of $302.28 and a high of $317.93 before closing the day at $303.39, a decrease of 3.07%.

The convertible notes jumped 20 points outright on Friday with stock up 22% on a large earnings beat.

While improved dollar-neutral on Friday, the notes did not open up as much as anticipated given the stock move.

Opendoor contracts

While volume was thin, Opendoor’s 0.25% convertible notes due 2026 saw a large dollar-neutral contraction on Monday as stock continued its freefall.

The 0.25% convertible notes changed hands at 50 in the late afternoon with the yield about 19.625%.

The notes were down 0.75 point dollar-neutral.

Opendoor’s stock continued to plummet. It traded to a high of $2.08 and a new 52-week low of $1.73 before closing the day at $1.74, a decrease of 14.11%.

The real estate technology company’s stock and convertible notes have been in a free-fall throughout the year as rising rates have hit the housing market.

Earnings did little to turn the tide with Opendoor reporting larger losses than anticipated in its third quarter-earnings report late last week.

MongoDB’s new low

While volume was light, MongoDB’s 0.25% convertible notes due 2026 fell to their lowest outright level on Monday since March 2020.

The notes fell 2 points outright to 99.25 early in the session.

However, they returned to par in the late afternoon.

MongoDB’s stock traded to a new 52-week low of $137.93 and a high of $148.26 before closing the day at $141.84, a decrease of 2.44%.

The cloud computing database company’s 0.25% convertible notes have fallen 13 points outright in the past week with stock down more than 25%.

While MongoDB will not report earnings until early December, stock has been dragged down by poor earnings results from industry peers.

Mentioned in this article:

Insulet Corp. Nasdaq: PODD

MongoDB Inc. Nasdaq: MDB

Opendoor Technologies Inc. Nasdaq: OPEN

Pinduoduo Inc. Nasdaq: PDD

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