Morning Commentary: Convertibles trading volume opens session light; Tesla notes gain

By Abigail W. Adams

Portland, Me., Feb. 18 – The convertibles secondary space launched Tuesday with decent trading volume with $70 million on the tape about one hour into the session, according to a market source.

However, there were few notable movements in the space.

Tesla Inc.’s 2% convertible notes due 2024 were again in focus with the notes gaining outright alongside stock.

The 2% notes – a high delta issue which largely trades in line with equity – rose 15 points outright to 283.375 early in the session, a market source said.

There was about $5 million in reported volume one hour into the session.

Tesla stock continued its upward momentum early Tuesday on the heels of a secondary offering.

Tesla stock was changing hands at $848.50, an increase of 6.06%, shortly before 11 a.m. ET.

The electric car manufacturer sold 2.65 million shares at $767 a share prior to the market open on Friday.

Tesla stock was again on the rise after two analysts raised their price target for the company.

Morgan Stanley analyst Adam Jonas raised his upside price target to $1,200 a share and base target to $500 a share from $650 and $360, respectively, Bloomberg reported.

While the price target was increased, Jonas maintained his underweight rating of the stock.

A Sanford C Bernstein analyst also raised the price target for the stock to $730 from $325.

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