Morning Commentary: Okta, MongoDB convertible notes fall outright, trade flat on swap

By Abigail W. Adams

Portland, Me., Sept. 1 – There was an uptick of activity in the convertibles secondary space on the first trading day of the new month with several convertible issuers active as their equities made outsized moves – to the downside.

It was another brutal day for equity markets with heavy selling dragging indexes deep into the red as Treasury yields shot higher.

The Dow Jones industrial average was down 265 points, or 0.86%, the S&P 500 index was down 1.17%, the Nasdaq Composite index was down 1.83% and the Russell 2000 index was down 2.24% shortly before 11 a.m. ET.

There was $78 million on the tape about one hour into the session.

Okta Inc.’s convertible notes were active as stock tanked following earnings where management discussed problems in the integration of its recently acquired Auth0.

Okta’s 0.375% convertible notes due 2026 sank 5 points outright with stock off more than 30%.

The notes were changing hands at 80 early in the session.

However, the notes were trading in line on swap, a source said.

Okta’s 0.125% convertible notes due 2025 fell 4.5 points outright to 87.5 early in the session.

The notes were also flat dollar-neutral, a source said.

Okta’s stock was changing hands at $62.87, a decrease of 31.21%, shortly before 11 a.m. ET.

Stock tanked despite an earnings beat with the cyber-security company reporting losses per share of 10 cents versus analyst expectations for losses per share of 30 cents.

Revenue was $451.81 million versus analyst expectations for revenue of $431.46 million.

The company also raised its earnings guidance and reaffirmed its revenue forecast.

However, stock took a beating after management discussed some issues with the integration of its recent acquisition of Auth0.

MongoDB Inc.’s 0.25% convertible notes due 2026 plummeted outright alongside stock following earnings.

The 0.25% convertible notes sank 30 points outright with stock down 24%.

The notes were seen at 140 early in the session.

MongoDB’s stock was changing hands at $245.22, a decrease of 23.75%, shortly before 11 a.m. ET.

Stock tanked despite an earnings beat with the software database company reporting losses per share of 23 cents versus analyst expectations for losses of 28 cents.

Revenue was $303.7 million versus analyst expectations for revenue of $284.4 million.

However, forward guidance came in below expectations.

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