Morning Commentary: Lam Research continues to fall, Carvana places convertible preferreds

By Abigail W. Adams

Portland, Me., Dec. 4 – The descent of convertible notes from semiconductor companies continued Monday morning but online automotive retailer Carvana Co. agreed to a private placement of $100 million of class A convertible preferred stock.

Among chipmakers Lam Research Corp.’s 1.25% convertible notes due 2018 fell another 11 points in trading and Micron Technology Inc.’s 3% convertible notes due 2043 another 4 points in early trades.

Lam’s 1.25% convertible notes dipped to 299.857 in early trades, according to Trace data. The notes had closed Friday at 310, after losing about 40 points in trading activity since investor confidence in the semiconductor sector waivered last week.

Lam stock also continued its downward spiral with trades at $183.46, a decrease of 2.23%.

Micron Technology’s 3% convertible notes due 2043 traded at 140.473, a 4 point decrease from Friday’s close, according to Trace data. Micron stock was also down 3.36% at $40.58.

Micron stock was one of the hardest hit in the sell-off of chipmakers’ stock that began last week after analysts warned the upswing in the sector may soon come to an end.

In a private placement, Carvana placed $100 million in class A convertible preferred stock to yield 5.5% with an initial conversion premium of 10%.

Dundon Capital Partners LLC, a Dallas, Texas-based private investment fund, will buy the securities in a deal that is expected to generate $98.5 million for Carvana.

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