Liberty Media up outright, contracts dollar-neutral; Pioneer eyed; Redfin, NIO volatile

By Abigail W. Adams

Portland, Me., Nov. 13 – The convertibles secondary space was active on Friday as equity benchmarks rebounded from Thursday’s dip.

Liberty Media Corp.’s 0.5% notes due 2050 exchangeable for Live Nation Entertainment Inc.’s common stock were in focus.

While the notes jumped on an outright basis, they were contracting dollar-neutral.

Pioneer Natural Resources Co.’s 0.25% convertible notes due 2025 were active as stock jumped more than 5% during Friday’s session.

While volume was light, Redfin Corp.’s 0% convertible notes due 2025 rebounded on an outright basis after selling off following its earnings report earlier in the week.

NIO Inc.’s 4.5% convertible notes due 2024 were also volatile on a wild day for the company’s equity.

Liberty Media in focus

Liberty Media’s 0.5% notes due 2050 exchangeable for Live Nation Entertainment’s common stock were in focus on Friday.

The 0.5% notes, which dipped below par during Thursday’s session, popped back above with stock again on the rise alongside the broader market.

However, the notes were contracting on the move up.

The 0.5% exchangeable notes jumped almost 2 points outright with stock up more than 6%.

The notes were changing hands at 100.5 versus a stock price of $64.72 early in Friday’s session, a source said.

They climbed to a 101-handle as the session progressed and were seen changing hands at 101.5 versus a stock price of $65.70 in the mid-afternoon.

While the notes were up outright, they were contracting 0.25 to 0.375 point dollar-neutral, a source said.

“They’re offloading the shoe,” a source said.

With the greenshoe typically used to stabilize a deal, once the notes were trading above par, underwriters were selling the excess amount.

Live Nation’s stock traded to a high of $66.45 and a low of $62.75 before closing the day at $66.08, an increase of 6.03%.

Pioneer active

Pioneer Natural Resources’ 0.25% convertible notes due 2025 saw another round of active trading on Friday as the oil and gas company’s stock climbed more than 5%.

The notes were changing hands at 114.75 in the late afternoon.

Pioneer Natural Resources’ stock traded to a high of $91.16 and a low of $87.24 before closing the day at $90.67, an increase of 5.14%.

The 0.25% notes have been active for the past few sessions.

The company is investment grade, which makes the convertible notes sought after, a source said.

Redfin volatile

While volume was light, Redfin’s 0% convertible notes due 2025 were rebounding on an outright basis after selling off earlier in the week.

The 0% convertible notes traded up to 95 on Friday.

However, they were contracting slightly on the move up, a source said.

Redfin’s stock traded to a low of $42.05 and a high of $44.14 before closing the day at $42.94, a decrease of 1.74%.

The 0% convertible notes have been volatile surrounding the company’s earnings report.

The notes, which have largely struggled below par since pricing, traded up to par last week following the residential real estate technology platform’s third-quarter earnings.

However, the notes traded down to the low 90s earlier in the week as stock sold off more than 13% over Monday and Tuesday.

Stock has pared its losses over the past few sessions.

NIO volatile

NIO’s 4.5% convertible notes due 2024 were volatile on a wild day for the Shanghai-based electric car manufacturer’s equity.

The deep-in-the-money convertible notes trade as an equity surrogate, a source said.

They traded as high as 555 early in the session as NIO’s American Depositary Shares hit a new 52-week high.

However, the notes traded down to 473 in the late afternoon as equity tanked following the release of a report from short-seller Citron Research.

NIO’s ADRs set a new 52-week high of $54.20 early in Friday’s session.

However, they traded to a low of $40.55 following the release of the report and closed the day at $44.56, a decrease of 7.76%.

NIO’s equity tanked after Citron Research warned of a 48% drop in value due to increased competition from Tesla Inc. in China.

The report set a price target of $25 for NIO’s equity.

NIO has been on a tear over the past few months with its equity rising more than 1,000% as investor interest in renewable energy and electric vehicles surged.

Stock traded as low as $1.66 less than one year ago.

The 4.5% convertible notes were in deeply distressed territory as recently as April with the notes trading in the 40s, according to Trace data.

Mentioned in this article:

Live Nation Entertainment Inc. NYSE: LYV

Pioneer Natural Resources Co. NYSE: PXD

Redfin Corp. Nasdaq: RDFN

NIO Inc. NYSE: NIO

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