Morning Commentary: Tesla’s convertible bonds gain after posting better-than-expected results

By Stephanie N. Rotondo

Seattle, Aug. 3 – Tesla Inc.’s convertibles were trading in good volume early Thursday as the market reacted to the company’s latest earnings release.

The Palo Alto, Calif.-based automaker announced the results – posting a narrower-than-expected loss – after the market closed on Wednesday.

The company’s convertible debt was trading up ahead of the numbers and continued to climb upward come Thursday trading.

A market source saw the 2.375% convertible notes due 2022 rising to a 123 to 124 context, which compared to levels around 119 at Wednesday’s close. The 0.25% convertible notes due 2019 were meantime about 4 points higher around 112.5, versus the 108 to 108.125 range in midweek trading.

And, the 0.5% convertible notes due 2021 ticked up to 113.5 bid, 114.25 offered. The paper had traded with a 110 handle on Wednesday.

As for the company’s stock (Nasdaq: TSLA), it was also on the rise, gaining over 6% in mid-morning trading.

For the second quarter, Tesla’s net loss was $336 million, or $2.04 per share. That compared to a loss of $293 million, or $2.09 a share, the year before.

On an adjusted basis, earnings per share came to $1.33.

Revenue was $2.79 billion.

Analysts polled by Thomson Reuters had forecast adjusted EPS of $1.82 on revenue of $2.51 billion.

The company also said it had more than $3 billion in cash at the end of the quarter.

Additionally, Model 3 production is expected to hit previously announced targets.

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