Morning Commentary: Apellis convertibles worth watching on Wednesday; Akamai higher

Chicago, Aug. 23 – The center of convertible bond action on Wednesday was in secondary trading.

An issue to watch during the session is most certainly going to be the 3.5% convertibles due in 2026 from Apellis Pharmaceuticals Inc.

In a morning when most stocks were making generally moderate moves, mostly not more than 4% or 5% in either direction, Apellis’ stock was up a whopping 32% mid-morning.

The trading activity started late on Tuesday after the market closed when the company announced that it was honing in on the problem with a safety issue on its macular degeneration drug, probably the needles used for the injection.

One of the first reported trades on the Wednesday tape put the company’s convertibles 25 points higher, at 130. Activity later in the day should establish the new price point for the issue.

The notes were trading at prices over 200 as recently mid-July.

The stock was marked at $40.66 just after 11 a.m. ET, better by 32.17%.

Akamai in focus

Akamai Technologies Inc.’s 1.125% convertible notes due 2029 were holding the limelight in early Wednesday activity after working centerstage on Tuesday.

The notes were continuing to notch gains in early reported trades, routinely topping 99.

The issued priced on Aug. 15 and has been moving below par.

However, slowly over the last few days they have been firming near, but not quite up to, their original price.

The cloud service company’s stock was up another 1% in early trading on Wednesday morning.

Chegg eyed

In small trades, Chegg Inc.’s 0% convertible notes due 2026 nudged higher to 77.25 on Wednesday morning after an announcement was made via a Securities and Exchange Commission filing that the company traded more of the notes for cash and common stock.

The notes have been trading roughly in that 70-range for most of the year, including when the company traded a more substantial portion of the issue in early March.

The education technology company’s stock fell off a cliff on May 1 when the company announced earnings and has yet to recover.

The stock price was halved and the convertible notes suffered, but the notes have managed very steady trading between 70 and 80 throughout the year.

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