Morning Commentary: Peloton convertible notes in focus early on takeover speculation

By Abigail W. Adams

Portland, Me., Feb. 7 – It was a quiet start to the day in the convertibles secondary space with equities starting the week strong despite a rising 10-year Treasury yield.

The Dow Jones industrial average was up 81 points, or 0.23%, the Nasdaq Composite was up 0.43%, the S&P 500 index was up 0.20%, and the Russell 2000 index was up 0.67% shortly before 11 a.m. ET.

There was $67 million on the tape about one hour into the session with one name dominating the tape – Peloton Interactive Inc.

Peloton’s 0% convertible notes due 2026 jumped on an outright basis as stock skyrocketed following media reports that the company was being eyed as a takeout target.

The 0% convertible notes shot up almost 6 points outright with stock up more than 20%.

They were changing hands at 91 versus a stock price of $30.25 early in the session.

There was $11 million in reported volume.

Peloton’s stock was changing hands at $29.89, an increase of 21.57%, shortly before 11 a.m. ET.

Stock skyrocketed as media reports swirled about a potential takeover of the company with reports on Monday that the company was interested in exploring potential offers.

The Wall Street Journal reported afterhours Friday that Amazon.com Inc. was considering making a bid for the company.

Nike Inc. has also expressed interest with analysts also pointing to Apple Inc. as a potential bidder.

“Everyone’s coming to the party,” a market source said. “It could be every one of them or none of them.”

© 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.