NuVasive drops outright but gains on swap; Intel in line after posting positive earnings

By Rebecca Melvin

New York, July 28 – NuVasive Inc.’s convertibles skidded lower on an outright basis but expanded on swap on Friday after the San Diego-based medical device maker reported mixed quarterly results and news that two top managers are leaving the company.

NuVasive said that chief operating officer John Hannon was leaving the company to pursue other interests and that chief financial officer Quentin Blackford resigned, effective Aug. 25.

The departures rattled investors, sending shares down more than 12%.

The NuVasive 2.25% convertibles due 2021 fell 15 points on an outright basis in busy dealings, but were up 2 points on a dollar-neutral, or hedged, basis amid a spike up in volatility, a New York-based trader said.

The spine surgery products maker reported revenue that was lower than some estimates but reported adjusted earnings that were better than expected.

Also active in trader were Intel Corp.’s convertibles, and those were trading mixed to in line with the underlying shares after the Santa Clara, Calif.-based chip giant reported better-than-expected second-quarter earnings and boosted its full-year forecast.

Intel 3.25% convertibles due 2039 were trading at 171.717, and the Intel 3.496% convertible due 2035 were trading at 135.3 early Friday after closing out Thursday at 133 to 134. Intel shares were up 25 cents, or 0.75% at $35.22.

Meanwhile, Tesla Inc.’s 2.375% convertibles due 2022 recovered ground on Friday, trading up to 121.74 from 120 on Thursday, when it had dropped more than 2 points.

Otherwise, trading was described as “sleepy” heading into a summer weekend.

“It’s very quiet,” a second market source said.

“No one wants to do anything because no one knows what the next move will be in the equity markets, so they are sitting tight,” the source said.

Half the market is sitting tight and half of the market is out, he said.

Looking ahead to next week, convertibles players expect more earnings news to create catalysts for trade.

“We’ve hit the heart of earnings season. There will be some names moving around on the back of that,” a trader said.

NuVasive gains on swap

NuVasive bonds traded off after news that its COO and CFO are leaving the company.

The NuVasive bonds were quoted at 127.63, against shares that were down $9.39, or 12%, at $67.51.

But shares fell even farther by late afternoon, dropping $10.43, or 14% to $66.47.

Along with the departure of the COO, the company announced some promotions.

The resignation of CFO Blackford was unrelated to the organizational updates. Blackford is leaving the company to pursue another opportunity outside the spine industry, according to a company news release.

Board member Vicky Capps will help with the transition and to find a new CFO.

Mentioned in this article:

Intel Corp. Nasdaq: INTC

NuVasive Inc. Nasdaq: NUVA

Tesla Inc. Nasdaq: TSLA

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