Morning Commentary: Illumina in focus as stock plunges

By Abigail W. Adams

Portland, Me., July 12 – The convertibles secondary space was active early in Friday’s session with $123 million in reported volume on the tape.

One name accounted for the lion’s share of trading activity – Illumina Inc.

Illumina’s convertible notes were down on an outright basis as stock plummeted after the genetic analysis company cut its revenue forecast and received a ratings downgrade.

Illumina’s 0% convertible notes due 2023 dropped almost 10 points outright to change hands at 108.375, according to a market source.

The bonds saw more than $36 million in reported volume early in the session.

The 0% notes closed Thursday around 117.75.

Illumina’s 0.5% convertible notes due 2021 were down about 19 points outright. They were changing hands at 135.375 early in the session.

The bonds saw more than $20 million in reported volume early in the session.

The notes were previously trading in the 152 to 154 range, a market source said.

Illumina stock plummeted to $305.83, a decrease of 15.9%, shortly before 11 a.m. ET.

Stock was down after Illumina reduced full year guidance and announced second-quarter revenue would be approximately $835 million, which was well below analyst expectations for revenue of $887.9 million.

BofA Merrill Lynch reduced their price target for Illumina to $290 from $355.

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