Convertibles secondary quiet: Medallia, Shopify, Fiverr gains continue; Twitter active

By Abigail W. Adams

Portland, Me., Oct. 12 – Trading volume was light in the convertibles secondary space on Monday with bond markets closed and many accounts on vacation.

However, equity markets continued their rally on optimism over better-than-expected earnings reports in the weeks ahead with the tech sector leading the charge.

The Dow Jones industrial average closed Wednesday up 250 points, or 0.88%, the S&P 500 was up 1.64%, and the Nasdaq composite was up 2.56%.

There was $35 million on the tape a little over one hour into Monday’s session and $200 million on the tape about one hour before the market close, sources said.

Recent deals were in focus.

Medallia Inc.’s 0.125% convertible notes due 2025, Fiverr International Ltd.’s 0% convertible notes due 2025 and Shopify Inc.’s 0.125% convertible notes due 2025 dominated the tape on Monday with the notes continuing to improve.

Twitter Inc.’s 1% convertible notes due 2021 were also posting gains on an outright basis as stock broke out to a new 52-week high.

Medallia in focus

Medallia’s 0.125% convertible notes due 2025 were the top traded issue of Monday’s session with the notes continuing to improve.

The 0.125% convertible notes were changing hands at 108.25 with stock off early in the session.

They were seen trading at 108.375 versus as stock price of $31.49 in the late afternoon.

There was $11.5 million in reported volume about one hour before the market close.

The notes continued to trade on a 108-handle with stock off more than 2% during Monday’s session.

Medallia’s stock traded to a high of $32.77 and a low of $31.10 before closing the day at $31.38, a decrease of 2.4%.

While the 0.125% notes were below par until early October, they rose alongside stock and the broader market last week.

Fiverr gains

Fiverr’s 0% convertible notes due 2025 continued to shoot higher on an outright basis as stock added to its gains.

The 0% convertible notes were up more than 4 points outright with stock up more than 5% in intraday activity.

The notes were changing hands at 110 early in the session.

They were continued to gain as the session progressed and were changing hands at 110.875 versus a stock price of $171.35 in the late afternoon.

The notes were up another 1 point dollar-neutral, a source said.

There were $10 million of the bonds on the tape heading into the market close.

Fiverr’s stock traded to a high of $174.42 and a low of $164.74 before closing the day at $166.10, an increase of 2.82%.

Fiverr’s 0% convertible notes were the most recent deal to price after the primary market took a breather heading into earnings season.

The notes have skyrocketed on an outright and dollar-neutral basis since hitting the secondary space on Oct. 8.

Shopify active

Shopify’s 0.125% convertible notes due 2025 also continued their upward momentum in active trading.

The 0.125% notes were trading on a 116-handle for the majority of the session as stock gave back some of its gains.

They were seen changing hands at 116.625 versus a stock price of $1,096.56 in the late afternoon.

There were $9.5 million of the bonds on the tape.

Shopify’s stock traded to a high of $1,130 and a low of $1,085.30 before closing the day at $1,090, a decrease of 0.55%.

Twitter active

Twitter’s 1% convertible notes due 2025 were also active as stock broke out to a new 52-week high in intraday activity.

The 1% notes were up more than 1 point outright with stock up more than 5%.

They were changing hands at 101 in the late afternoon.

There was about $10 million in reported volume

Twitter’s stock traded to a high of $48.65 and a low of $47.41 before closing the day at $48.25, an increase of 5.10%.

Stock hit a new 52-week high of $48.65 on Monday.

Stock jumped after Deutsche Bank analysts upgraded Twitter to “Buy” from “Hold” and raised their price target to $56 from $36.

The upgrade was due to an anticipated increase in ad revenue.

While Twitter’s stock hit its highest level in nearly six years on Monday, Twitter’s 1% notes move on a light delta with the conversion premium high, a source said.

Twitter’s stock was $52.64 when the 1% notes priced in 2014.

Mentioned in this article:

Fiverr International Ltd. NYSE: FVRR

Medallia Inc. NYSE: MDLA

Shopify Inc. NYSE: SHOP

Twitter Inc. NYSE: TWTR

© 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.