Morning Commentary: Tesla, Twitter convertibles in focus post-earnings; markets firm

By Abigail W. Adams

Portland, Me., Oct. 25 – After a steep decline in equity markets, indexes were seeing green on Thursday with earnings surprises from Tesla Inc. and Twitter Inc. pulling markets higher.

The companies’ convertible notes were active in the secondary space as their equities soared.

Tesla’s three tranches of convertible notes were active as stock soared in response to a profit-making quarter that crushed analyst expectations.

The notes were improving on both an outright and dollar-neutral basis, according to a market source.

The 0.25% convertible notes due March 2019 traded up about 2 points outright to 104.5.

The 1.25% notes due 2021 traded up 5 points outright to 107.5.

The 2.375% notes due 2022 traded up 7 points outright to 116.5.

Tesla stock continued to see large price swings and traded as high as $321.00 and as low as $301.00 early Thursday.

Stock was at $302.20, an increase of 4.75%, shortly before 11 a.m. ET.

Tesla squashed analyst expectations in its third-quarter earnings, reporting non-GAAP earnings per share of $2.90 versus analyst expectations of a loss per share of 19 cents and an adjusted profit of $516 million.

Twitter’s 0.25% convertible notes due 2024 were also active and making gains on an outright basis.

The 0.25% notes jumped more than 4 points outright to trade just south of 92, according to market data.

Twitter stock was up more than 15% to $32.09 shortly before 11 a.m. ET.

Twitter reported third-quarter earnings per share of 21 cents on revenue of $758 million versus analyst expectations for earnings per share of 14 cents on $702 million in revenue.

The 0.25% convertible notes due 2024 have traded below par since July when Twitter stock tanked in response to the social networking site clamping down on fake user accounts.

Stock was $40.10 when the 0.25% notes priced in June.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.