Lucid convertible notes gain; MicroStrategy, Marathon Digital, Exact Sciences active

By Abigail W. Adams

Portland, Me., Dec. 20 – While equity markets snapped their losing streak on Tuesday, activity in the secondary space continued to dwindle as the market entered into the final days of the year.

Equity indexes notched nominal gains on Tuesday after seeing heavy selling since the Federal Reserve’s Dec. 14 announcement.

The Dow Jones industrial average closed up 92 points, or 0.28%, the S&P 500 index closed up 0.10%, the Nasdaq Composite index closed up 0.01% and the Russell 2000 index closed up 0.54%.

There was $62 million in reported convertibles trading volume about one hour into the session and $448 million on the tape heading into the market close.

Lucid Group Inc.’s 1.25% convertible notes due 2026 were in focus with the notes on the rise after the EV startup secured a large capital raise.

Bitcoin-exposed names were active on the tape with MicroStrategy Inc.’s 0.75% convertible notes due 2025 nominally improved while Marathon Digital Holdings, Inc.’s 1% convertible notes due 2026 continued to wallow in distressed territory.

Exact Sciences Corp.’s convertible notes also continued to see active trading as stock resumed its uptrend.

Lucid improves

Lucid’s 1.25% convertible notes due 2026 were in focus on Tuesday with the notes making large gains after the company secured a large capital raise.

The 1.25% convertible notes jumped 1.375 points outright.

They were changing hands at 51.75 in the late afternoon with the yield about 19.125%, according to a market source.

There was $16 million in reported volume, with the notes the most actively traded issue in the secondary space.

The notes are not equity sensitive with the conversion premium over 650%.

However, Lucid’s stock traded to a high of $7.89 and a low of $7.22 before closing the day flat at $7.23.

While stock was flat, the convertible notes improved following news the EV startup had raised $1.5 billion in stock sales.

Lucid completed an at-the-market stock offering where it sold about 56.2 million shares raising $600 million.

The company also raised $915 million through the sale of 85.7 million shares to Saudi Arabian investment funds.

Bitcoin bull

Bitcoin exposed convertible notes were active on the tape on Tuesday, which sources attributed to end-of-year repositioning.

MicroStrategy’s 0.75% convertible notes due 2025 were nominally improved.

The notes gained about 0.5 point outright as stock wavered between gains and losses.

The 0.75% notes were seen at 52.125 versus a stock price of $171.82 heading into the market close.

The yield was 24.125%.

There was $12 million in reported volume.

MicroStrategy’s stock traded to a high of $175.43 and a low of $168 before closing the day at $168.85, a decrease of 0.80%.

Marathon Digital’s 1% convertible notes due 2026 were unchanged with the notes continuing to wallow deep in distressed territory.

The 1% notes were changing hands at 23 with the yield 43.5%, according to a market source.

There was $9.5 million in reported volume.

The notes are a credit play with the conversion premium over 1,800%, a source said.

However, Marathon Digital’s stock closed Tuesday at $3.91, an increase of 1.03%.

Bitcoin continued to inch up on Tuesday with the cryptocurrency trading at $16,864, an increase of 1.44%, shortly after the close of U.S. equity markets.

Exact Sciences active

Exact Sciences’ convertible notes remained active on Tuesday as stock resumed its uptrend.

The 0.375% convertible notes due 2027 added about 0.75 point outright with stock up more than 2.5%.

The notes were trading at 83.875 versus a stock price of $51.13 early in the session, according to a market source.

They were trading just shy of 84 versus a stock price of $51.63 heading into the market close.

There was $7 million in reported volume in the notes.

The 0.375% convertible notes due 2028 were up 0.25 point outright.

The notes were trading at 79.25 versus a stock price of $50.04 early in the session.

They closed the day at 79.5.

There was $6 million in reported volume.

Exact Sciences’ stock traded to a high of $52.12 and a low of $49.38 before closing the day at $51.09, an increase of 2.18%.

The molecular diagnostics company’s convertible notes and stock have surged since last Friday when competitor Guardant Health Inc. released clinical results that showed Exact Sciences’ existing colorectal cancer screening test to be more effective than a blood test by Guardant.

Mentioned in this article:

Exact Sciences Corp. Nasdaq: EXAS

Lucid Group Inc. Nasdaq: LCID

Marathon Digital Holdings, Inc. Nasdaq: MARA

MicroStrategy Inc. Nasdaq: MSTR

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