Morning Commentary: Weatherford pressured by earnings; Akamai goes up; Peabody, Chesapeake off

By Stephanie N. Rotondo

Seattle, Oct. 26 – Earnings news was pushing around convertible paper on Wednesday.

Weatherford International plc’s 5.875% convertible notes due 2021 were “all over the place” in active trading, according to on New York-based sellsider.

He saw prints at 113.375 against a share price of $5.50 as well as 117.25 versus a share price of $5.92 in early trading.

The trader noted that the paper trades on a 75% delta.

The equity underlying the debt was down over 10% in early trading.

The volatility in the name came as the company reported a much wider net loss for the third quarter, due largely to after-tax charges.

Meanwhile, an earnings beat was helping Akamai Technologies Inc.’s 0% convertible notes due 2019 gain ground.

A trader pegged the issue at 104.5 at mid-morning, which compared to 102 at the open.

“The stock is up $7.50,” he added.

The company saw a nearly 6% increase in revenue for the quarter, helped by growing demand for cloud security products.

Away from earnings, Peabody Energy Corp. and Chesapeake Energy Corp. continued to be busy. Following Tuesday’s trend, the convertibles remained soft.

Peabody’s 4.75% convertible junior subordinated debentures due 2066 were seen at 18.5.

Paper had been as high as 26 on Tuesday, though it ended closer to 19.

Chesapeake’s 5.5% convertible senior notes due 2026 were seen trading just below par at mid-morning. Prior to the open, the bonds had been slightly north of par, according to a trader.

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