Morning Commentary: Bloom Energy upsizes, falls flat on debut; Illumina down outright

By Abigail W. Adams

Portland, Me., Aug. 7 – The first new paper in two weeks entered the secondary space on Friday.

Bloom Energy Corp. priced an upsized $200 million of five-year convertible notes after the market close on Thursday at the rich end of talk with a coupon of 2.5% and an initial conversion premium of 25%.

Price talk was for a coupon of 2.5% to 3% and an initial conversion premium of 20% to 25%.

The greenshoe was also upsized to $30 million.

The initial size of the offering was $135 million with a greenshoe of $15 million.

While the new paper was in demand during bookbuilding, it fell flat on an outright basis on its secondary market debut.

The 2.5% notes were seen at par bid with some weakness in stock early in the session, a source said.

They were up about 0.5 point dollar-neutral.

Meanwhile, it was an otherwise quiet Friday in the secondary space with earnings continuing to drive trading activity.

Illumina Inc.’s convertible notes were active and sinking on an outright basis as stock sold off early in the session.

The company’s 0.5% convertible notes due 2021 dropped 18 points outright to 142 with stock down 12%.

However, the notes were largely moving inline dollar-neutral, a source said.

The 0.5% notes were active with more than $20 million on the tape about one hour into the session.

While volume was comparatively light, Illumina’s 0% convertible notes due 2023 were down outright but up dollar-neutral early in the session.

The 0% convertible notes dropped 6 points outright to 105.5.

However, the notes expanded about 1 point dollar-neutral, a source said.

Illumina stock traded down to $346.34, a decrease of 13.27%, shortly before 11 a.m. ET.

Stock tanked after the genetic analytics company missed on both the top and bottom lines in its second-quarter earnings report.

Illumina reported earnings per share of 62 cents versus analyst expectations for earnings of 67 cents.

Revenue was $633 million versus analyst expectations for revenue of $679.6 million.

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