Acorda convertible notes tank post-earnings; Square drops outright; Aphria notes gain

By Abigail W. Adams

Portland, Me., Aug. 2 – While Friday opened with the sell-off in equities intensifying following China’s rebuttal to U.S. president Donald Trump’s threat to impose new tariffs on Chinese goods, earnings related news continued to dominate trading activity in the convertibles secondary space.

Several convertible issuers saw large stock moves following their earnings announcement.

Acorda Therapeutics Inc.’s 1.75% convertible notes due 2021 tanked on Friday as stock cratered following its second-quarter earnings report.

Square Inc.’s 0.5% convertible notes due 2023 were also trading down on an outright basis as stock fell following the mobile payment company’s second-quarter earnings.

However, Aphria Inc.’s 5.25% convertible notes due 2024 jumped as stock soared after the cannabis company posted a profit in its fourth-quarter report.

Pluralsight Inc.’s 0.375% convertible notes due 2024 were again active on Friday with the notes remaining weak after tanking on an outright basis during Thursday’s session.

Acorda tanks

Acorda Therapeutics’ 1.75% convertible notes fell on Friday with the notes coming in 6 points as stock shaved off nearly 50% of its value.

The notes traded down to 73 bid, 74 offered by the late afternoon, a market source said. The yield to maturity on the notes rose to 19%.

Acorda stock traded as high as $5.56 and as low as $2.87 before closing the day at $3.10, a decrease of 48.93%.

Stock sank despite a second-quarter earnings beat. Acorda reported losses per share of 55 cents versus analyst expectations for losses per share of $1.06.

The pharmaceutical company also beat analyst expectations on the top line with revenue of $50.5 million.

However, revenue was down 67% with sales of the company’s recently approved Parkinson’s treatment Inbrija flat.

Stock sold off after the company announced it would not provide full-year sales guidance.

Square drops outright

Square’s 0.5% convertible notes due 2023 were trading down on an outright basis as stock dropped following the company’s second-quarter earnings.

The 0.5% convertible notes dropped more than 10 points outright to 117, according to a market source.

Square stock traded as high as $70.81 and as low as $67.25 before closing the day at $69.60, a decrease of 14.05%.

While Square beat on both the top and bottom lines in its second-quarter earnings report, its stock was trading off on weak guidance.

Square reported earnings of 21 cents per share versus analyst expectations for earnings per share of 26 cents.

Revenue was $563 million versus analyst expectations for revenue of $568 million.

However, forward guidance was light, thestreet.com reported.

In addition to earnings, Square announced that it was selling its catering business Caviar to DoorDash, which some analysts viewed as a positive.

Aphria jumps

While volume was light, Aphria’s 5.25% convertible notes due 2024 jumped as stock soared after the cannabis company reported earnings.

The 5.25% convertible notes rose to 88 bid, 89 offered on Friday, a market source said.

The notes are slow to trade and were last seen changing hands on Trace in mid-July at 84.5.

Aphria stock traded as high as $7.45 during Friday’s session and closed the day at $7.33, an increase of 40.96%.

Aphria reported earnings of C$15.8 million. The profit was a surprise with analysts expecting a loss of C$13.9 million, Markets Insider reported.

The surprise profit lifted the overall cannabis sector.

Pluralsight active

Pluralsight’s 0.375% convertible notes due 2024 were again active on Friday after dominating activity during the previous session.

The 0.375% convertible notes remained weak due to earnings, a market source said.

They were changing hands at 91.5 early in the session but dropped back down to 90 by the market close.

Pluralsight stock traded as high as $19.84 during Friday’s session but came in to close the day at $18.62, an increase of 0.32%.

The notes dropped 18 points outright but saw a large dollar-neutral expansion during Thursday’s session as stock dropped almost 40% following its earnings report.

Mentioned in this article:

Acorda Therapeutics Inc. Nasdaq: ACOR

Aphria Inc. NYSE: APHA

Pluralsight Inc. Nasdaq: PS

Square Inc. NYSE: SQ

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