Morning Commentary: Tesla convertibles flat but active on earnings reports; Inphi active

By Abigail W. Adams

Portland, Me., Feb. 8 – Tesla, Inc.’s convertible notes and Inphi Corp.’s 0.75% convertible notes due 2021 were active on Thursday following both companies’ earnings reports, although both saw little fluctuation in trading prices.

Tesla’s 2.375% convertible notes due 2022 did not attract as much attention as its fellow convertible notes early in Thursday’s session with trading activity focused on the electric car manufacturer’s 1.25% convertible notes due 2021 and 0.25% convertible notes due 2019.

The earnings report did little to push the convertible notes out of their typical trading range. Tesla’s 1.25% notes traded in a range of 111 to 112 early Thursday, according to Trace data. Tesla’s 0.25% notes saw trades in the 108 to 109 range.

Tesla’s 2.375% notes traded in the 120 to 122 range. Tesla stock was down to $334.76, a decrease of 2.96% in early trading Thursday.

Tesla reported a record net loss of $675.4 million on revenue of $3.29 billion in the fourth-quarter, translating to an earnings per share loss of $4.01, or a non-GAAP earnings per share loss of $3.04.

However, revenue beat expectations and the earnings per share loss was less than expected.

Tesla struggled to meet its Model 3 production goals in 2017, but CEO Elon Musk has promised 2018 will be a “transformative year,” for the company, and affirmed a weekly production rate of 5,000 Model 3 sedans by the end of the second quarter, in a company news release.

Inphi’s 0.75% convertible notes dropped about 2 points on an outright basis and were trading in the 89 to 91 range early Thursday as the company’s stock plummeted.

Inphi’s struggling convertible notes were previously in the 92 to 93 range. Inphi stock dropped to $24.94, a decrease of 16.06%, in early trading Thursday. The semiconductor company specializing in data movement interconnects reported fourth-quarter and year-end results after the market close Wednesday.

Inphi reported a net operating loss of $74.9 million, or a loss of $1.78 per diluted share, compared to a net income of $26.5 million, or 60 cents per diluted share, in 2016.

Non-GAAP net income was $67.2 million, or $1.52 per diluted share, for 2017.

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