Convertibles issuers see big stock swings; Fastly down with stock; Beyond Meat contracts

By Abigail W. Adams

Portland, Me., May 6 – The convertibles primary market remained closed on Thursday with the first week of May becoming the second week of 2021 and the second quarter with no deals to price.

While no new paper entered the secondary space, the aftermarket was active as convertibles issuers saw huge stock swings.

While equity benchmarks closed a choppy trading session in positive territory, the stocks of several convertibles issuers saw large movement to the downside.

Fastly Inc.’s 0% convertible notes due 2026 were in focus with the notes down outright as stock tanked more than 20% following the cloud computing company’s earnings report.

Beyond Meat Inc.’s 0% convertible notes due 2027 were trading down on an outright and dollar-neutral basis in the run-up to the company’s earnings report.

Expedia Group Inc.’s 0% convertible notes due 2026 hit their lowest outright level in recent history in the ahead of the company’s earnings report.

However, the notes expanded on the move down.

Fastly in focus

Fastly’s 0% convertible notes due 2026 were in focus on Thursday with the notes dropping on an outright basis as the cloud computing company’s stock sank more than 20%.

The already struggling 0% notes were down about 9 points outright to 86.25 early in the session.

They continued to trade off as the session progressed and were marked at 84.25 versus a stock price of $42 in the late afternoon.

While down outright, the notes were moving in line dollar-neutral on a 60% delta.

“No one made any money unless heavily hedged,” a source said.

Fastly’s stock traded to a high of $48.50 and a low of $41.41 before closing the day at $42.31, a decrease of 27.03%.

Stock tanked after the company reported earnings and announced the departure of the company’s chief financial officer.

Fastly reported a loss per share of 12 cents versus analyst expectations for a loss of 11 cents per share.

Revenue was $84.9 million versus analyst expectations for revenue of $84.3 million.

Fastly also announced its chief financial officer Adriel Lares will be leaving the company.

However, Lares will remain in his position until a successor is found and will help during the transition.

Beyond Meat contracts

Beyond Meat’s 0% convertible notes due 2027 were trading down on an outright and dollar-neutral basis in the run-up to the company’s earnings report.

The 0% convertible notes were down about 2 points outright with stock off about 2%.

They traded down to 91.125 in the late afternoon, the lowest outright level for the notes since the plant-based food company priced the $1.15 billion issue in March.

The notes were contracting on the move down, a source said.

Beyond Meat’s stock traded to a high of $120.46 and a low of $115.46 before closing the day at $119.04, a decrease of 2.08%.

Stock continued to trade off after hours after Beyond Meat reported a large earnings miss.

The company reported losses per share of 42 cents versus analyst expectations for losses per share of 27 cents.

Revenue was $108.2 million versus analyst expectations for revenue of $114.35.

Stock traded down to $113.19 shortly before 5 p.m. ET.

Expedia expands

Expedia’s 0% convertible notes due 2026 were also trading down on an outright basis as stock dropped in the run-up to the online travel company’s earnings report.

The 0% convertible notes dropped about 3 points outright with stock off a little more than 3% during Thursday’s session.

The 0% notes were marked at 106.5 in the late afternoon, their lowest outright level since early March.

However, the notes expanded on the move down.

The notes were up 0.375 point to 0.5 point dollar-neutral, a source said.

“They’re the big winner of the day,” a source said.

Expedia’s stock traded to a high of $170.92 and a low of $162.62 before closing the day at $164.82, a decrease of 3.57%.

While down during regular market hours, stock popped in the post market following the company’s earnings report.

Stock jumped more to $176.10, an increase of 6.84%, shortly before 5 p.m. ET.

The company reported a loss per share of $2.02 versus expectations for a loss per share of $2.30.

Revenue was $1.25 billion versus expectations for revenue of $1.11 billion.

Mentioned in this article:

Beyond Meat Inc. Nasdaq: BYND

Expedia Group Inc. Nasdaq: EXPE

Fastly Inc. NYSE: FSLY

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