Iconix Brand collapses on accounting restatements, lowered guidance; HomeAway drops back

By Rebecca Melvin

New York, Nov. 6 – Iconix Brand Group Inc.’s two convertible bond issues plunged on Friday after the New York-based brand management company announced restatements of certain financials between 2013 and 2015 and lowered its forward guidance. Iconix shares collapsed 57%.

HomeAway Inc.’s convertible bonds dropped back on an outright basis, and contracted on a hedged basis, after strong gains on Thursday. The reversal was linked to disappointment that Priceline Group Inc. said it won’t counter Expedia Inc.’s buyout offer for the company.

HomeAway was “getting clobbered,” a New York-based trader said. The bonds dropped a couple of points to about 101, and “came in” on swap by about 0.5 point after expanding 1.5 points on Thursday.

The trader predicted further contraction for the bond on Monday.

Priceline Group’s trio of convertible bonds were lower in active trade along with the underlying shares of the Norwalk, Conn.-based online travel services site, which were down 0.9% following headlines that it won’t bid for HomeAway.

Meanwhile, Horizon Pharma plc’s convertibles jumped outright and gained on swap after the Dublin, Ireland-based pharmaceutical company reported earnings that were better than expected. Horizon Pharma shares jumped 22%.

In the broader markets, equity markets were narrowly mixed and Treasuries were lower. The Labor Department said early Friday that non-farm payrolls rose a better-than-expected 271,000 in October and that the unemployment rate fell to a seven-year low of 5% from 5.1% previously.

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