LinkedIn steady despite lower shares; Peabody convertibles near zero amid bankruptcy fears

By Rebecca Melvin

New York, March 16 – LinkedIn Corp.’s convertibles were little changed in active trade on Wednesday as the common shares of the Mountain View, Calif.-based career-networking company dropped 5% following an analyst’s downgrade.

The LinkedIn shares were downgraded to “equal weight” from “overweight” by Morgan Stanley analyst Brian Nowak, who said earnings and guidance had disappointed and that he had overestimated the company’s ability to grow its platform and underestimated the investment needed to make it grow.

LinkedIn’s 0.5% convertible was among the most active names in a day that was pretty inactive, convertibles sources said.

The convertible market has “ground to a standstill,” a New York-based trader said.

Equities rallied into the close, with the S&P 500 stock index ending up about 0.5% to its highest level for 2016 so far.

Meanwhile, Peabody Energy Corp., the St. Louis based coal producer, delayed the interest payment on two loans and warned that it may have to seek Chapter 11 bankruptcy protection if it cannot negotiate an agreement with creditors.

The delayed interest payment triggers a 30-day grace period. In its regulatory filing, Peabody said uncertainty around global coal fundamentals and economic growth concerns of some countries that import coal as well as the potential for additional regulatory requirements on coal producers were reasons for the notice.

The Peabody Energy 4.75% convertibles due 2066 had already been trading around 1, and slipped to 0.1 on Wednesday.

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