Morning Commentary: Twitter, Salesforce.com reverse course amid takeover talk; Medicines retreats

By Stephanie N. Rotondo

Seattle, Oct. 6 – Twitter Inc. and Salesforce.com remained notable early Thursday as investors continued to react to takeover speculation.

On Tuesday, it was reported that Salesforce.com – along with Google and Disney, among others – was considering making a bid for the social media company. Come Wednesday, Twitter’s convertible debt – and equity – improved, while Salesforce.com took a beating.

Early Thursday, however, news outlets were reporting that Google, Disney and Apple were no longer interested in buying Twitter. There were also some indications that Salesforce.com’s enthusiasm for such a deal was waning.

As a result, Twitter was trading off and Salesforce.com was recouping its previous losses.

Twitter’s 1% convertible notes due 2021 were seen around 93.5 at mid-morning, which compared to previous levels around 96. The 0.25% convertible notes due 2019 were pegged around 95.5, down about a point outright.

The equity (NYSE: TWTR) was meantime down over 18% in early trading.

As for Salesforce.com, its 0.25% convertible notes due 2018 jumped to a 119 to 120 context from levels around 177 on Wednesday. The stock (NYSE: CRM) was up 4.5%.

Also on the radar were the Medicines Co.’s 2.75% convertible notes due 2023. The paper opened near 99 but was placed at 96 at mid-morning, versus a stock (Nasdaq: MDCO) price of $33.25.

“The stock is down $5,” a trader noted.

The weakness came as yet another drugmaker suspended the development of a new drug.

Alnylam Pharmaceuticals said late Wednesday that it was halting trials of an experimental therapy for a rare genetic condition that can cause heart failure, as late-stage studies indicated those who took the therapy died more often than those who took placebos.

Medicines is partnered with Alnylam on another drug, though so far that treatment has not shown any serious side effects.

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