Nutanix convertibles ‘explode’ on buyout rumors; CNX Resources, MongoDB notes active

By Abigail W. Adams

Portland, Me., Oct. 14 – It was a relatively quiet day in the convertibles secondary space as volatility continued to whipsaw equities.

The gigantic swings in equities seen during the previous session continued on Friday although in the opposite direction.

Following a strong open, indexes plunged into negative territory, giving back much of their gains from Thursday’s session.

The Dow Jones industrial average closed Friday down 395 points, or 1.32%, the S&P 500 index closed down 2.34%, the Nasdaq Composite index closed down 3.08% and the Russell 2000 index closed down 2.44%.

While volatility has whipsawed markets, it has been great for delta hedging, a source said.

“Things are OK as long as credit holds,” a source said.

While there were signs of panic in the market heading into Thursday’s Consumer Price Index report, selling activity has been light, a source said.

Nutanix Inc. was a bright spot in the market with the company’s stock and convertible notes “exploding” following takeover reports.

CNX Resources Corp.’s 2.25% convertible notes due 2026 saw an active session with profit-taking in the name after a spike in stock over the past week.

MongoDB Inc.’s 0.25% convertible notes due 2026 remained active following their inclusion in the Refinitiv convertibles indexes.

Nutanix surges

Nutanix’s 0.25% convertible notes due 2027 dominated the tape on Friday with the notes jumping double digits on a takeover report.

The 0.25% convertible notes jumped 12 points outright to trade up to 88.125 early in the session, a source said.

They came in slightly as the session progressed and were wrapped around 87.5 in the late afternoon, a source said.

There was $30 million in reported volume.

Nutanix’s stock traded to a low of $24.99 and a high of $26.52 before closing the day at $26.35, an increase of 24.59%.

The notes were mostly held by outright accounts, a source said.

Nutanix’s stock and convertible notes skyrocketed following a Wall Street Journal report the cloud-computing company was exploring a potential sale to a private-equity firm.

The report was still preliminary “but there’s enough info out to have these things ripping,” a source said.

The takeover by a private equity firm would trigger a change-of-control par put in the notes.

CNX active

CNX’s 2.25% convertible notes due 2026 saw some action on Friday with some profit-taking in the name as stock came in after a strong run.

The 2.25% convertible notes traded as high as 155.5 early in the session but were trading just shy of 151 in the late afternoon.

There was $10 million in reported volume.

CNX’s stock traded to a low of $17.24 and a high of $18.10 before closing the day at $17.34, a decrease of 4.41%.

There may have been some profit-taking in the name after stock hit its highest level in more than one month during Thursday’s rally, a source said.

MongoDB in focus

MongoDB’s 0.25% convertible notes due 2026 continued to see activity following their inclusion in the Refinitiv convertible indexes with the notes weaker outright alongside stock.

The 0.25% convertible notes were relatively unchanged outright as stock sank with the broader market.

The notes were changing hands at 110 in the late afternoon, according to a market source.

MongoDB’s stock traded to a high of $187.58 and a low of $171.87 before closing the day at $172.08, a decrease of 4.8%.

The 0.25% convertible notes have been a mainstay on the volume charts in recent sessions with the notes added to the Refinitiv Convertibles indexes on Thursday.

The notes were added as they trade at their multi-year low with stock hitting a 52-week low in the selling pressure early Thursday.

Mentioned in this article:

CNX Resources Corp. NYSE: CNX

MongoDB Inc. Nasdaq: MDB

Nutanix Inc. Nasdaq: NTNX

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