Morning Commentary: IAC expands on spinoff; Tesla notes in focus as stock breaks $400

By Abigail W. Adams

Portland, Me., Dec. 19 – While the year was drawing to a close, the convertible secondary space continued to see decent trading volume.

Accounts were cleaning up their portfolios and putting money to work, a market source said.

IAC/InterActive Corp.’s 0.875% convertible notes due 2022 jumped on both an outright and dollar-neutral basis as stock ripped following the announced spinoff of the Match Group.

The 0.875% notes due 2022 traded up 10 points outright to 167.

They expanded about 1 point dollar-neutral in decent volume, a market source said.

While volume was light, IAC’s 0.875% notes due 2026 were also posting gains.

The 2026 notes rose about 4 points outright to 110.75. They were up about 1.25 points dollar-neutral, the source said.

IAC’s 2% convertible notes due 2030 were not active on the tape.

IAC stock jumped to $236.64, an increase of 6.98%, shortly before 11 a.m. ET.

IAC’s convertible notes have steadily improved in anticipation of the spinoff. The convertible debt will fall to the Match Group, which is a higher vol. stock, a market source said.

Meanwhile, market players continued to eye Tesla Inc. as stock broke past $400.

Tesla’s 1.25% convertible notes due 2021 were again major volume movers in the secondary space.

However, the notes appeared to be contracting on the stock move.

The 1.25% notes traded up to 124.5 early in the session.

Stock was $402.85, an increase of 2.47%, shortly before 11 a.m. ET.

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