New CalAmp up in active trade; LinkedIn expands; Blucora, Insulet, Web.com better on swap

By Rebecca Melvin

New York, May 1 – CalAmp Corp.’s new 1.625% convertibles traded up on an outright basis Friday in active trade after the five-year notes priced toward the rich end of and through the rich end of price talk, market players said.

CalAmp’s 1.625% convertibles due 2020 were seen at 100.75 when shares of the Oxnard, Calif.-based developer and marketer of wireless communications products were up fractionally at about $19.80. Later the notes were quoted at 101 to 101.75 when shares were higher.

LinkedIn Corp.’s convertibles expanded about 2 points amid a dive in the underlying shares of the Mountain View, Calif.-based social media company. A bleak outlook that accompanied the just-completed quarter – which was essentially in line with expectations – was behind LinkedIn’s steep stock fall.

Other names that were better on swap following their earnings reports included Blucora Inc. and Web.com Group Inc. as well as the Insulet Corp. 2% convertibles, a New York-based trader said.

In the broader markets, equities moved higher, with the major indices virtually erasing Thursday’s losses. The Nasdaq Composite index added 63.97 points, or 1.3%, to 5,005.39; the S&P 500 stock index gained 22.78 points, or 1.1%, to 2,108.29, and the Dow Jones industrial average recouped 183.54 points, or 1%, to 18.024.06. The Dow dropped 195.01 points, or 1.1%, on Thursday.

New CalAmp adds on swap

CalAmp’s 1.625% convertibles due 2020 were seen at 101 to 101.75 when shares were up nearly 1%.

Earlier the CalAmp convertibles had been quoted at 100.75 when shares of the Oxnard, Calif.-based developer and marketer of wireless communications products were up fractionally at about $19.80.

The shares ended up only a nickel, or 0.25%, at $19.76.

The bonds traded very actively as did those of Echo Global Logistics Inc. on their debut on Thursday, when about $210 million of bonds of the $200 million face deal changed hands.

“There is a sizable amount of the deal turning over,” a New York-based trader said in the early going. Why these deals, which were fairly small, countered the typical illiquidity of a small deal wasn’t immediately known.

The Rule 144A offering was upsized to $150 million from an initially talked $125 million. Pricing came toward the rich end of 1.5% to 2% coupon talk and through the rich end of 32.5% to 37.5% premium talk.

J.P. Morgan Securities LLC and Jefferies & Co. were joint bookrunners, with Canaccord as a co-manager.

The deal came with a call spread. About $13.4 million of the proceeds will be used to fund the net cost of the hedge. The strike on the warrant transactions will initially be $39.42, which boosts the initial conversion premium from the issuer’s perspective to 100%.

LinkedIn expands

LinkedIn’s 0.5% convertibles due 2019 were 101.5 bid, 102 offered in early action with shares down 20% at about $200.00 on Friday. The bonds had slumped to 99 late Thursday from about 111 earlier that day as shares nose-dived 25% in after-hours trade.

“LinkedIn has found its level, up about 2 points,” a New York-based trader said Friday.

The company’s first-quarter loss widened to $43 million, or 34 cents a share, compared to a year-earlier loss of $13.5 million, or 11 cents.

Excluding one-time items, LinkedIn said it earned 57 cents a share, which was in line with estimates. Revenue was $637.7 million compared to $473 million in the year-earlier period.

For the current quarter, the business-oriented social media company said earnings excluding items was expected to be 28 cents per share, which is far below the 74 cents per share that analysts were estimating. Full-year adjusted earnings were forecast at $1.90, sharply lower than the $3.05 estimated by analysts.

The company expects revenue of $670 million to $675 million for the second quarter, which was below estimates for $720 million.

On Wednesday, Twitter Inc.’s convertibles disappointed when they fell in line with the underlying shares on disappointing earnings. Amid a 25% downdraft in the shares, the bonds should have “gotten a lot better,” a trader said.

Blucora adds a point on swap

Blucora’s 4.25% convertible due 2019 was a gainer for hedged players on Friday. It was one of a number of issues that had a positive response to earnings volatility, a trader said.

The bonds were quoted at 97.5 bid, 98.5 offered versus an underlying share price of $15.25.

That represented about a 1-point move up on swap, a New York-based trader said.

The Bellevue, Wash.-based online search and tax preparation business reported earnings that beat estimates on revenue that was in line, and it guided in line for the current quarter.

First-quarter income was $23.1 million, or 55 cents per share, which was down from $26 million in the year-earlier first quarter. But excluding items, earnings were $1.03 per share, which was better than expected.

Revenue was $174.8 million, which was down compared to $216.2 million for the year-earlier quarter but better than the $172.6 million expected.

For the second quarter, the company expects revenue between $114 million to $123.5 million, and earnings, excluding items of between $16.1 million to $20 million, or 38 cents to 48 cents per share.

Blucora shares ended up $1.88, or 14%, at $15.55 on Friday.

Insulet expands

Insulet's 2% convertibles moved around on Friday but were seen at 92 bid, 93 offered with the underlying share at $25.32.

Shares of the Bedford, Mass.-based medical device maker ended down $2.88, or 10%, at $26.97.

Insulet missed estimates and guided current quarter revenue below consensus, although it reaffirmed guidance for full-year revenue.

“Those bonds have expanded,” a trader said, although it was unclear by how much as the bond was moving around, he said.

“This is a back-end loaded story. They are not cutting guidance but reaffirmed guidance for the year. People like the credit,” he said.

Insulet reported a loss of $11.8 million, or 21 cents per share, for the first quarter and missed estimates for a loss of 11 cents per share.

Revenue was $61.2 million, which didn’t meet expectations for revenue of $68.2 million.

For the current quarter, Insulet said it expects revenue of $67 million to $70 million and full-year revenue of $305 million to $320 million.

Web.com expands 0.75 point

Web.com’s 1% convertibles due 2018 traded at 95 bid, 96 offered versus an underlying share price of $21.42.

Web.com shares were up $2.69, or 14.6%, to $21.06.

That was up 4 points on an outright basis but up 0.75 point on swap, a New York-based trader said.

This report was upbeat, he said.

Web.com said that first-quarter income of $2.3 million, or 4 cents per share, which was up from $0.5 million, or a penny per share, for the first quarter of 2014.

Excluding one-time items. The company beat analysts’ estimates, with earnings of $29.5 million for the first quarter, or 58 cents per share, compared to $33.1 million, or 61 cents per share, in the year-earlier period. But the results were better than the company’s guidance of 53 cents to 55 cents per share.

Revenue came to $137.7 million for the period, which was down slightly compared to $141.2 million in the year-earlier period but better than expected.

Mentioned in this article:

Blucora Inc. Nasdaq: BCOR

CalAmp Corp. Nasdaq: CAMP

Echo Global Logistics Inc. Nasdaq: ECHO

Insulet Corp. Nasdaq:PODD

LinkedIn Inc. Nasdaq: LNKD

Web.com Group Inc. Nasdaq: WWWW

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