Morning Commentary: Twitter surges amid takeover speculation; Digital Turbine prices small deal

By Rebecca Melvin

New York, Sept. 23 – Twitter Inc. was the name of the day in U.S. convertibles on Friday morning. The two convertible bond issues of the San Francisco-based social media company surged upward to the mid to upper-90s range along with a 20% jump in the company’s common stock.

Driving up the securities were reports that a sale of the company may be imminent. The Wall Street Journal reported that Salesforce.com is considering buying Twitter, although the exploration is in the early stages.

A New York-based trader said that the Twitter convertibles were the main focus of the session with the “takeover becoming more apparent.”

The Twitter 0.25% convertibles due 2019 traded up about 4 points to 97, and the Twitter 1% convertibles due 2021 gained a little more to about the same level.

Twitter’s common stock was up $3.635, or nearly 20%, to $22.255.

Digital Turbine Inc. priced a small $16 million deal of 8.75% four-year convertible senior notes, according to a company news release. The notes are being used to repay about $11 million of secured debt and for general corporate purposes.

Shares of the Austin, Texas-based mobile device-management products company slumped after the announcement, dropping 18 cents, or 15%, to $1.06 on the Nasdaq stock market.

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