Morning Commentary: Convertibles quiet in early trading; 2U gains outright post-earnings

By Abigail W. Adams

Portland, Me., July 31 – The convertibles secondary space was quiet on Friday with only $46 million in reported volume about one hour into the session, a source said.

However, the secondary space stood poised to close out July on firm footing with the tech sector continuing to rocket higher following strong earnings from Apple, Amazon, Alphabet and Facebook.

The Nasdaq composite continued to rise even with the Dow Jones industrial average and S&P 500 launching the day in the red amid a sell-off in the energy sector.

While volume was light, education technology company 2U, Inc.’s 2.25% convertible notes due 2025 rose alongside stock following its second-quarter earnings report.

The 2.25% convertible notes gained more than 10 points outright with stock up over 6%.

The notes were changing hands at 178.5 early in the session.

However, volume was light with only $2 million on the tape.

2U stock was $46.80, an increase of 6.68%, shortly before 11 a.m. ET.

The company beat on both the top and bottom lines in its second-quarter earnings report.

2U reported a loss per share of 34 cents versus analyst expectations for a loss per share of 44 cents.

Revenue was $182.69 versus analyst expectations for revenue of $175.12 million.

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