Datadog convertibles in focus as earnings loom; Trip.com up; Twitter trades on takeout

By Abigail W. Adams

Portland, Me., Oct. 26 – It was an average day in the convertibles secondary space with the market unchanged on a choppy day for equity markets with indexes mixed as investors digested the latest batch of earnings.

The Nasdaq Composite index was the sole index to remain in negative territory throughout the day after some high-profile disappointments from the tech sector.

While the Nasdaq fought back to almost unchanged with markets strong early, selling pressure took hold midway through the session with the indexes able to remain in the green closing near the session lows.

The Dow Jones industrial average closed Wednesday up 2 points, or 0.01%, the S&P 500 index closed down 0.74%, the Nasdaq closed down 2.04% and the Russell 2000 index closed up 0.46%.

There was $111 million in reported convertibles trading volume about one hour into the session and $400 million on the tape about one hour before the market close.

Datadog Inc.’s 0.125% convertible notes due 2025 were active with the notes lower alongside stock as the company’s earnings report approaches.

Trip.com Group Ltd.’s 1.5% convertible notes due 2027 were on the rise in active trading on a strong day for the company’s equity.

Twitter Inc.’s convertible notes were active although still trading with some risk premium as Elon Musk prepares to close his $44 billion takeover of the company.

Datadog lower

Datadog’s 0.125% convertible notes due 2025 saw heavy volume on Wednesday with the notes lower alongside stock.

The 0.125% notes were down about 3.5 points outright with stock off more than 8%.

The notes were changing hands at 117.5 versus a stock price of $83.11 early in the session, according to a market source.

They fell to 115.5 as pressure on stock accelerated as the session progressed.

There was $12 million in reported volume.

Datadog’s stock traded to a high of $86.69 and a low of $80.49 before closing the day at $81.50, a decrease of 8.17%.

Datadog was lower as disappointing reports from tech behemoths dragged down the broader sector.

Datadog is slated to report earnings on Nov. 3.

Trip.com rises

Trip.com’s 1.5% convertible notes due 2027 were on the rise in active trading as the ADR space continued to recover from Monday’s bloodletting.

The 1.5% notes traded as high as 99 in intraday activity but were on a 97-handle heading into the close, a source said.

There was $10 million in reported volume.

The Shanghai-based online travel company’s equity traded to a high of $23.72 and a low of $22.53 before closing the day at $23.32, an increase of 6.58%.

Twitter active

Twitter’s convertible notes were active although still trading with some risk premium as Musk’s takeover of the company approaches.

Twitter’s 0.25% convertible notes due 2024 rose 1 point to a 111-handle on Wednesday.

They were changing hands at 111.5 in the late afternoon.

There was $7 million in reported volume.

The 0% convertible notes due 2026 return to a 98-handle with the notes wrapped around 98.5 heading into the close, according to a market source.

The tranche also saw $7 million in reported volume.

Twitter’s stock traded to a low of $52.77 and a high of $53.50 before closing the day at $53.35, an increase of 0.97%.

Musk has stated his intention to complete his $44 billion takeover of the company by the Friday deadline and is reportedly in the final stages of the debt financing agreements with the banks providing financing.

Musk will pay $54.20 a share for Twitter, an offer he aggressively made only to attempt to back out of after it was accepted.

Mentioned in this article:

Datadog Inc. Nasdaq: DDOG

Trip.com Group Ltd. Nasdaq: TCOM

Twitter Inc. NYSE: TWTR

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