Morning Commentary: Cannabis convertibles trading higher; Square pops; Elanco busy

By Rebecca Melvin

New York, Nov. 6 – Convertibles trading was pretty active, especially in pockets of the market, as gains in equities tailed off on Friday and former vice president Joe Biden overtook president Donald Trump in the tally of votes in Pennsylvania and Georgia, states in which Trump was initially leading.

The switch puts Biden closer victory in the U.S. presidential election. If he prevails in one of these it will put him over the 270 electoral votes he needs to win.

Cannabis was a busy area in convertibles, according to one market source on Friday.

Aphria Inc., a Canadian medical marijuana company with a $350 million convertible, saw its shares spike nearly 8% in the early going. The 5.25% convertibles due 2024 had been a “busted convert,” trading with a 78 handle in October. It wasn’t heard in trade on Friday.

The stock was up 42 cents, or 7.7%, at $5.88 last. On Oct. 5, the convertible traded at 78 with the stock at $4.86.

Aurora Cannabis Inc.’s convertible was up more than 5 points to 56 as its underlying shares surged.

Elsewhere, Square Inc.’s 0.5% convertibles due 2023 jumped 25 points outright on the day. The shares were trading up about $20, or 11.5% at $195.79.

The Square 0.275% notes due 2022 weren’t trading, and their price still stood at Thursday’s closing price of 760.1.

The financial tech company reported strong earnings and Bitcoin revenue for the first time.

Elanco Animal Health Inc. saw its mandatory preferreds trading actively and the company’s bonds also, albeit on light volume for that paper, according to a market source, with the common stock falling more than 10% post earnings.

The Greenfield, Ind.-based provider of medicine and vaccinates for pets and livestock reported earnings that edged estimates, but its guidance for sales missed expectations.

The Elanco 5% mandatory convertible preferreds due 2023 traded down 4.75 points to $45.26. The $550 million issue, which priced earlier this year in January, traded as high as $49.39 and as low as $43.84 during the session. The company’s common shares were down $3.62, or 11%, at $28.95 at late morning.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.