Wayfair, Allscript, Infinera, Zillow convertibles expand; Karyopharm Therapeutics tanks

By Abigail W. Adams

Portland, Me., Feb. 22 – The convertibles secondary space was returning to its normal pace on Friday with the trading frenzy surrounding Fortive Corp.’s 0.875% convertible notes due 2022 tempering.

Earnings reports and company news pushed several long-standing issues into the spotlight with many convertible notes seeing large price swings.

Wayfair Inc.’s convertible notes were making gains on an outright and dollar-neutral basis as stock broke out to a new 52-week high following an earnings beat.

Infinera Corp.’s 2.125% convertible notes due 2024, Allscripts Healthcare Solutions Inc.’s 1.25% convertible notes due 2020 and Zillow Group Inc.’s convertible notes expanded dollar-neutral as stock saw large price movements following earnings reports.

Karyopharm Therapeutics Inc.’s 3% convertible notes due 2025 tanked on a dollar-neutral basis after an FDA internal review questioned the efficacy of one of the products in its pipeline.

Wayfair dominates

Wayfair’s convertible notes dominated trading activity in the secondary space with the notes making large gains on both an outright and dollar-neutral basis as stock soared post-earnings.

The home goods e-commerce company’s 1.125% convertible notes due 2024 jumped more than 25 points outright, a market source said.

The notes were changing hands around 145.75, a market source said. They were trading between 120.5 and 121.25 during Thursday’s session.

Wayfair’s 0.375% convertible notes due 2022 also jumped about 25 points outright.

The 0.375% notes were changing hands just north of 153 on Friday, a market source said. They were previously trading around 128.

The notes were expanded about 0.75 point dollar-neutral, a market source said.

Wayfair stock skyrocketed on Friday. Stock traded as high as $156.78 and closed Friday at $149.95, an increase of 27.86%.

Stock soared after Wayfair reported a large earnings beat.

Wayfair reported a loss per share of $1.12 versus analyst expectations of a loss per share of $1.28.

Revenue rose to $2.01 billion versus analyst expectations for revenue $1.97 billion.

Wayfair also reported a 38% increase in its customer base.

Infinera’s earnings

Infinera’s 2.125% convertible notes due 2024 were making gains on an outright and dollar-neutral basis as stock soared post-earnings.

The 2.125% convertible notes gained 4 points outright to trade up to 85 in the mid-afternoon.

They expanded 0.75 point dollar-neutral, a market source said.

Infinera stock traded as high as $5.59 on Friday but closed the day at $5.26, an increase of 8.45%.

Infinera beat on both the top and bottom lines in its fourth-quarter earnings report.

The manufacturer of optical transmission equipment reported a loss per share of 25 cents versus analyst expectations for a loss per share of 27 cents.

Revenue was $332.1 million versus analyst expectations for revenue of $324.9 million.

Zillow’s earnings

Zillow’s convertible notes were also posting gains on an outright and dollar-neutral basis as stock soared following an earnings beat.

The 1.5% convertible notes due 2023 rose 5.25 points to 95.625. The 2% convertible notes due 2021 rose almost 8 points outright to 110.25.

The notes expanded about 0.375 point dollar-neutral, a market source said.

Zillow stock soared on Friday, closing the day at $44.06, an increase of 25.74%.

Zillow reported earnings per share of 1 cent, which beat analyst expectations for $0.

The online real estate company reported revenue of $365.3 million, which beat analyst expectations for revenue of $349.5 million.

Zillow also announced the CEO Spencer Rascoff will leave his position with the position to be filled by former CEO and co-founder Rich Barton.

Allscripts’ earnings

Allscripts’ 1.25% convertible notes due 2020 dropped on an outright basis but expanded dollar-neutral as stock tanked after an earnings miss.

The 1.25% convertible notes dropped 2 points outright to 98. However, they expanded 0.25 to 0.375 point dollar-neutral on the way down, a market source said.

Allscripts stock tanked on Friday. Stock traded down to $10.60, a decrease of 11.22%.

Allscripts missed on both the top and bottom lines in its fourth-quarter earnings report.

The electronic health records technology company reported earnings per share of 20 cents versus analyst expectations for earnings per share of 21 cents.

Revenue was $442.3 million versus analyst expectations for revenue of $538.4 million.

Karyopharm tanks

While volume was light, Karyopharm’s 3% convertible notes due 2025 tanked on both an outright and dollar-neutral basis as stock plummeted following the release of FDA briefing documents about the biotech company’s pending cancer treatment.

The 3% notes were quoted down 13 points to 67.875. They dropped 8 points dollar-neutral, a market source said.

Karyopharm stock traded as low as $4.65 during Friday’s session but closed the day at $5.07, a decrease of 43.48%.

The FDA briefing documents questioned the efficacy of Karyopharm’s cancer treatment selinexor.

The FDA documents stated the treatment had limited efficacy and demonstrated toxicity with the risks potentially outweighing the benefits.

The FDA granted Karyopharm a priority review for selinexor with the advisory committee meeting scheduled for Feb. 26.

Mentioned in this article:

Allscripts Healthcare Solutions Inc. Nasdaq: MDRX

Infinera Corp. Nasdaq: INFN

Karyopharm Therapeutics Inc. Nasdaq: KPTI

Zillow Group Inc. Nasdaq: Z

Wayfair Inc. NYSE: W

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