Midday Commentary: Tibco holds in on hedge after weak guidance; Dealertrack pops on Dealer.com deal

By Rebecca Melvin

New York, Dec. 20 - At least a couple of jarring news releases stirred up what was expected to be generally sedate trading in the convertibles market early Friday.

With the Christmas holiday looming next week, traders expected continuing, calm clean up, but Tibco Software Inc.'s 2.25% convertibles were pulled abruptly into action and below par after the Palo Alto, Calif.-based business software and services company offered guidance that was below estimates when it reported positive earnings Thursday.

Nevertheless the Tibco convertibles were seen better by 0.25 point to 0.5 point at 99.75 versus a share price of $21.00, using a delta of 15%, a New York-based trader said.

Tibco shares were down $3.48, or 14%, to $20.99 at late morning.

Moving in the opposite direction, Dealertrack Technologies, Inc. saw its convertibles pop 12 points to 14 points after the Lake Success, N.Y.-based retail auto software and services provider announced that it is buying Dealer.com in cash and stock worth nearly $1 billion.

Dealertrack's 1.5% convertibles due 2017 changed hands between 137 and 141 early Friday, which was up from about 125 to 127 before the news, according to Trace data.

Elsewhere, Cobalt International Energy Inc.' convertibles looked to be stabilizing after taking another leg down Thursday. The Houston-based oil and gas exploration company had reported that its Gulf of Mexico Aegean #1 exploratory well didn't encounter commercial hydrocarbons after reaching its objective total depth.

Cobalt's 2.625% convertibles due 2019 printed at 84.5, which was up from 82ish on Thursday according to Trace data.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.