3D Systems tightens talk; MPG Ingredients trades up on debut; Beyond Meat ‘pulverized’

By Abigail W. Adams

Portland, Me., Nov. 11 – The convertibles primary and secondary markets remained active on Thursday despite the closure of bond markets for the Veteran’s Day holiday.

One deal remained on the forward calendar – 3D Systems Corp.’s $350 million offering of five-year convertible notes.

The deal was in demand during bookbuilding with talk tightening.

Meanwhile, new paper from MGP Ingredients Inc. made its aftermarket debut. The new paper was putting in a strong performance with the notes trading up on an outright and dollar-neutral basis.

Earnings-related volatility continued to spark activity in several outstanding issues with Beyond Meat Inc. the disaster du jour.

The plant-based meat company’s 0% convertible notes due 2027 were ‘pulverized’ in high-volume activity as stock tumbled following a disappointing earnings report.

However, Opendoor Technologies Inc.’s 0.25% convertible notes due 2026 continued their upward momentum as stock soared following better-than-expected earnings.

3D Systems tightens talk

3D Systems’ offering of $350 million five-year convertible notes was in demand during bookbuilding with talk tightening to a fixed coupon of 0% and an initial conversion premium of 40% to 45%, a market source said.

Initial talk was for a coupon of 0% to 0.5% and an initial conversion premium of 35% to 40%.

The deal was in the market with assumptions of 350 basis points over Libor and a 42% vol.

Using those assumptions, the deal looked 1.18 points cheap at the midpoint of initial talk, a source said.

The increased premium range made sense given 3D Systems’ stock move on Thursday.

Stock closed the day at $25.21, a decrease of 10.13%.

MGP Ingredients expands

MGP Ingredients priced $175 million of convertible notes due 2041 after the market close on Wednesday at par with a 1.875% coupon and an initial conversion premium of 37.5%.

Pricing came toward the cheap end of talk for a coupon of 1.5% to 2% and at the midpoint of talk for an initial conversion premium of 35% to 40%, according to a market source.

The new paper was putting in a strong performance in the aftermarket.

The bonds were changing hands at 102.5 versus a stock price of $69.76 early in the session.

They continued to trade on a 102-handle in the late afternoon.

The notes expanded about 3 points dollar-neutral.

MGP stock traded to a high of $70.94 and a low of $69.54 before closing the day at $70.42, an increase of 0.014%

Beyond Meat ‘pulverized’

Beyond Meat’s already struggling 0% convertible notes due 2027 were once again the disaster du jour of the secondary space as stock tanked following disappointing earnings.

The 0% notes sank about 15 points outright with stock down more than 13%.

They were changing hands at 77 in the late afternoon.

The notes contracted about 3 points dollar-neutral on the move down.

“They’re getting pulverized,” a source said.

Beyond Meat stock traded to a high of $83.15 and a low of $76.77 before closing the day at $81.93, a decrease of 13.28%.

Beyond Meat reported losses per share of 87 cents versus analyst expectations for losses of 39 cents.

Revenue was $106.43 million versus analyst expectations for revenue of $109.2 million.

The company also issued weak forward guidance with fourth-quarter revenue expected to be $85 million to $110 million, which also fell short of expectations.

Opendoor’s earnings

Opendoor’s 0.25% convertible notes due 2026 continued their upward momentum in active trading on Thursday following better-than-expected earnings.

The 0.25% convertible notes gained about 15 points outright with stock up more than 15%.

They were changing hands at 136.625 versus a stock price of $23.50 early in the session, according to a market source.

The notes traded as high as 140 in intraday activity but returned to 136 heading into the market close.

The notes expanded about 0.5 point on the move up, a source said.

Opendoor stock traded to a high of $24.40 and a low of $22.08 before closing the day at $22.56, an increase of 15.57%.

Opendoor reported losses per share of 9 cents, which beat analyst expectations for losses of 17 cents. Revenue was $2.27 billion versus analyst expectations for revenue of $2.01 billion.

The company also issued strong forward guidance with fourth-quarter revenue expected to be $3.1 billion to $3.2 billion versus analyst expectations for revenue of $2.92 billion.

While Opendoor, which pioneered the instant-buying, home-flipping business, thrives, rival Zillow Group Inc. has discontinued its home buying program, which it blamed for its disastrous earnings report released in early November.

Mentioned in this article:

3D Systems Corp. NYSE: DDD

Beyond Meat Inc. Nasdaq: BYND

MGP Ingredients Inc. Nasdaq: MGPI

Opendoor Technologies Inc. Nasdaq: OPEN

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