Vocera in focus following acquisition; Lucid contraction continues; Teladoc hits low

By Abigail W. Adams

Portland, Me., Jan. 6 – It was a volatile day in the convertible bond secondary space as equity markets whipsawed between gains and losses.

While the tech sector broke its rout with the Nasdaq Composite closing the day in the green, the convertibles secondary space remained soft.

With the Nasdaq in negative territory and the 10-year Treasury yield continuing its ascent, “people were in their bunkers” early in the session, a source said.

The secondary space was down about 0.5 point early.

Several issues in busted territory continued to trade down from their lows since the start of the year.

“Outrights got smacked,” another source said.

While the tone improved with the Nasdaq turning positive as the session progressed, there was no rush to buy given the level of volatility.

And the volatility drove the Nasdaq back into negative territory heading into the close.

The Dow Jones industrial average closed the day down 170 points, or 0.47%, the S&P 500 index closed down 0.10% and the Nasdaq Composite index closed down 0.13%.

However, the Russell 2000 index was able to stay in the green and closed up 0.56%.

While the overall market remained weak, Vocera Communications Inc.’s 0.5% convertible notes due 2026 were a bright spot on Thursday.

The convertible notes skyrocketed on an outright basis following an announced merger that would take them out.

However, Lucid Group Inc.’s 1.25% convertible notes due 2026 continued to contract in high-volume activity.

Teladoc Health Inc.’s 1.25% convertible notes due 2027 were again trading down as stock hit a new 52-week low.

Recent issues and convertible notes trading around 90 seemed to be the most under pressure during the recent rout in equities, a source said.

Vocera’s acquisition

Vocera’s 0.5% convertible notes due 2026 were active on Thursday with the notes skyrocketing on an outright basis following news they would be taken out in an acquisition.

The 0.5% notes jumped 14 points outright.

The 0.5% notes were changing hands around 143.875 early in the session. They continued to trade on a 143-handle heading into the afternoon.

While the notes lagged on a dollar-neutral basis on the move up, they were trading according to the takeout matrix, sources said.

Outright accounts were the major winners in the acquisition. However, hedge accounts stood to gain about 0.5 point dollar-neutral.

There was about $18 million in reported volume.

Vocera’s stock closed Thursday at $79.17, an increase of 26.63%.

Stock jumped after Michigan-based medical technology company Stryker announced it was acquiring the company for an enterprise value of $3.09 billion.

Stryker will acquire all of Vocera’s outstanding stock at $79.25 per share. The deal is expected to close in the first quarter.

Lucid contracts again

Lucid’s 1.25% convertible notes due 2026 remained active on Thursday. While the notes improved on an outright basis, they continued to contract dollar-neutral.

The 1.25% notes were up about 1 point outright with stock up 3%.

They were changing hands at 98.625 versus a stock price of $38.15 in the late afternoon.

There was about $23 million in reported volume.

The notes were contracted about 0.5 to 0.75 point dollar-neutral early in the session, a source said.

They were down about 1 point dollar-neutral on the week, another source said.

Lucid’s stock traded to a low of $33.76 and a high of $38.58 before closing the day at $38.22, an increase of 4.2%.

Teladoc’s new low

Teladoc’s 1.25% convertible notes due 2027 were again trading down as stock hit a new 52-week low.

The 1.25% notes fell 2 points outright with stock down about 3%.

They were changing hands at 88.625 versus a stock price of $82.05 in the late afternoon.

However, the notes were moving in line dollar-neutral, a source said.

There was about $700 million in reported volume heading into the market close.

Teladoc’s stock traded to a high of $87.01 and a new 52-week low of $80.39 before closing the day at $81.76, a decrease of 3.04%.

Mentioned in this article:

Lucid Group Inc. Nasdaq: LCID

Teladoc Health Inc. NYSE: TDOC

Vocera Communications Inc. NYSE: VCRA

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