Workday convertible notes in focus; Bill.com gains outright; Peloton Interactive active

By Abigail W. Adams

Portland, Me., Aug. 27 – The convertibles secondary space saw a quiet end to the week as the highly anticipated announcement by Federal Reserve chairman Jerome Powell about the future of the Fed’s monetary policy pushed the S&P 500 index and Nasdaq Composite to fresh heights.

Investors poured into risk assets following Powell’s dovish tone.

While Powell stated bond tapering could begin in the current year, which market participants widely expected, he continued to stress the central bank’s patience regarding rate hikes.

The Dow Jones industrial average closed the day up 243 points, or 0.69%, the S&P 500 index closed the day up 0.88%, the Nasdaq Composite closed the day up 1.23% and the Russell 2000 index closed the day up 2.79%.

The convertibles secondary saw $78 million in reported volume about one hour into the session and $400 million in reported volume about one hour before the market close.

Earnings-related volatility was the driving force of trading activity.

Workday Inc.’s 0.25% convertible notes due 2022 were in focus with the notes gaining outright alongside stock following an earnings beat.

Bill.com Holdings Inc.’s 0% convertible notes due 2025 also surged outright alongside stock following earnings.

However, Peloton Interactive Inc.’s 0% convertible notes due 2026 fell alongside stock after a disappointing earnings report.

Workday’s earnings

Worday’s 0.25% convertible notes due 2022 were in focus with the notes jumping outright alongside stock following a large earnings beat.

The short-duration notes jumped about 17 points outright with stock up over 10%.

They were changing hands at 187 versus a stock price of $271.59 early in the session.

The notes traded at 186.125 versus a stock price of $270.46 in the late afternoon.

There was more than $27 million in reported volume.

Workday’s stock traded to a low of $263.27 and a high of $274.94 before closing the day at $269.28, an increase of 9.13%.

The financial management and human resource software company reported earnings per share of $1.23 versus analyst expectations for earnings of 78 cents.

Revenue was $1.26 billion versus analyst expectations for revenue of $1.24 billion.

Bill.com’s earnings

Bill.com’s 0% convertible notes due 2025 also surged on an outright basis alongside stock following its earnings report.

The notes jumped 32 points outright with stock up 30%.

The 0% notes were changing hands at 183.75 versus a stock price of $279.91 in the late afternoon.

There was $23 million in reported volume.

Bill.com’s stock traded to a low of $237 and a high of $288.88 before closing the day at $283.98, an increase of 29.64%.

While the bill payment software company missed on the bottom line it beat on the top.

The company reported a loss per share of 7 cents versus analyst expectations for a loss of 4 cents.

However, revenue was $78.3 million versus analyst expectations for revenue of $62.14.

Revenue guidance also beat expectations with the company projecting revenue in a range of $103.2 million to $104.2 million versus analyst expectations for revenue of $67.81 million.

Peloton’s earnings

Peloton’s 0% convertible notes due 2026 fell as stock tumbled following disappointing earnings.

The 0% convertible notes fell about 2 points outright with stock off more than 8%.

They were changing hands just shy of 91 versus a stock price of $104.25 in the late afternoon.

Peloton’s stock traded to a high of $108.80 and a low of 102.91 before closing the day at $104.34, a decrease of 8.55%.

Stock dropped after the exercise equipment company reported a loss per share of $1.05 versus the loss per share of 45 cents that was expected.

Revenue was $936.9 million versus the $927.2 million expected.

While the company beat on the top line, it provided weak guidance with the company expecting a decrease in revenue due to a reduction in price for its bike machines.

Despite the sell-off, several analysts upgraded Peloton’s stock following the earnings report.

Mentioned in this article:

Bill.com Holdings Inc. NYSE: BILL

Peloton Interactive Inc. Nasdaq: PTON

Workday Inc. Nasdaq: WDAY

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