Morning Commentary: Okta convertible notes active post-earnings, gain outright

By Abigail W. Adams

Portland, Me., June 3 – It was a slow morning in the convertibles secondary space as selling returned to equities on the heels of a better-than-expected non-farm payrolls report.

Indexes gave back much of their gains from Thursday’s strong session as investors once again reassess their bets on the Federal Reserve’s rate hike schedule.

The Dow Jones industrial average was down 263 points, or 0.81%, the S&P 500 index was down 1.44%, the Nasdaq Composite index was down 2.31% and the Russell 2000 index was down 0.88% shortly before 11 a.m. ET.

Okta Inc. was a bright spot on a red day with the software company’s convertible notes rising alongside stock after an earnings beat.

Okta’s 0.375% convertible notes jumped 4 points outright with stock up more than 8%.

The 0.375% notes were changing hands at 87 versus a stock price of $104.79 in the late morning.

There was $7 million in reported volume.

Okta’s 0.125% convertible notes due 2025 gained 2.5 points outright.

The notes were trading at 94.5 versus a stock price of $103.67 early in the session.

There was $2 million in reported volume.

Okta’s stock traded as high as $111.35 after the opening bell but came in as selling pressure took hold and was trading at $101.36, an increase of 8.2%, shortly before 11 a.m. ET.

Stock was on the rise after the company beat expectations with losses per share of 27 cents versus analyst expectations of losses of 34 cents.

Revenue was $414.94 million versus analyst expectations for revenue of $388.78 million.

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