Twitter bonds up, shares surge on takeout chatter; AMD adds again; Digital Turbine prices

By Rebecca Melvin

New York, Sept. 23 – Twitter Inc.’s two convertible bond issues traded actively on Friday after reports early in the session that a sale of the San Francisco-based social media company may be imminent.

The Twitter convertibles moved up multiple points to the mid to upper 90s range, while the common stock surged more than 21%.

A New York-based trader said that the Twitter convertibles were a central focus of attention with the “takeover becoming more apparent.”

Twitter didn’t comment on a potential acquisition. But according to news reports, a potential acquirer is Salesforce.com Inc., which has purchased more than half a dozen companies so far this year, including Demandware for $2.8 billion in July. In addition, Salesforce.com is believed to have been a potential acquirer of LinkedIn Corp., which ultimately agreed to be bought by Microsoft Corp. earlier this year.

Also trading on Friday was Advanced Micro Devices Inc.’s 2.125% convertibles due 2026, which rose nearly a point to just under 105. AMD’s common shares gained 18 cents, or 2.8%, to $6.55.

There were also buyers of Navistar International Corp.’s 4.75% convertibles due 2019, which were up a couple of points to 93.5, according to Trace data, despite a move lower in its common shares by 39 cents, or 1.8%, to $21.79.

Navistar shares had been on a tear this past month until Thursday. In early September, Volkswagen agreed to form a strategic alliance to supply engines to the truck and engine maker and took a $256 million equity stake in the company.

Intel Corp.’s 3.25% convertibles due 2039, which are well in the money, fell a point to 181. Intel’s common shares were also down about 1% to $37.19.

Also on Friday, Digital Turbine Inc. priced a small $16 million deal of four-year, 8.75% convertible senior notes, according to a company news release. The notes are being used to repay about $11 million of secured debt and for general corporate purposes.

Shares of the Austin, Texas-based mobile device-management products company stumbled after the announcement, dropping 24 cents, or 19%, to $1.00.

In the broader markets, equities fell after a two-day rally following the Federal Reserve’s decision to postpone raising interest rates at its regularly scheduled policy meeting earlier this week. Oil prices also fell as doubts surfaced ahead of a meeting next week that the Organization of the Petroleum Exporting Countries and other large oil producers can agree to production limits.

Twitter up amid takeout talk

The Twitter 0.25% convertibles due 2019 traded up about 3 points to 96 on Friday.

The Twitter 1% convertibles due 2021 bounced around, trading up to 97.25 and settling around 96.625, which was up more than 4 points from about 91 previously.

Twitter’s common stock closed up $3.99, or 21%, to $22.62.

Driving up the securities were reports that a sale of the company may be imminent. The Wall Street Journal reported that Salesforce.com is considering buying Twitter, although the exploration is in the early stages.

Twitter’s slow user expansion and contracting revenue growth have fueled speculation of a potential acquisition intermittently this year.

Mentioned in this article:

Advanced Micro Devices Inc. NYSE: AMD

Digital Turbine Inc. Nasdaq: APPS

Intel Corp. Nasdaq: INTC

Navistar International Corp. NYSE: NAV

Twitter Inc. Nasdaq: TWTR

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