Coinbase, MicroStrategy convertible notes rise amid crypto volatility; Guess? jumps

By Abigail W. Adams

Portland, Me., March 21 – While the convertibles primary market stood poised for a paperless week, the secondary space was active as markets continued to gain on the heels of the Fed announcement.

Equity indexes surged higher with Treasuries largely unchanged as markets celebrated a dovish Fed that reaffirmed rate cuts were coming.

The Dow Jones industrial average closed Thursday up 269 points, or 0.68%, the S&P 500 index closed up 0.32%, the Nasdaq Composite index closed up 0.20% and the Russell 2000 index closed up 1.14%.

There was $114 million in reported volume about one hour into the session and $681 million on the tape about one hour before the market close with large stock moves continuing to drive volume in outstanding issues.

Crypto was back in focus as Bitcoin rebounded from its recent pullback.

Coinbase Global Inc.’s recently priced 0.25% convertible notes due 2030 shot to new outright heights after only recently setting a new outright low in active trade.

MicroStrategy Inc.’s convertible notes were also riding the crypto wave with the most recently priced 0.875% convertible notes due 2031 briefly returning to par.

Bitcoin was once again on an upswing early in the session at $66,930, an increase of 4.25%, shortly before 11 a.m. ET.

However, the rally faded as the session progressed with Bitcoin trading at $65,451, a decrease of 3.16%, shortly before 5 p.m. ET.

Guess? Inc.’s 3.75% convertible notes due 2028 saw an explosion of interest with the notes making large outright gains as stock popped post-earnings.

Coinbase’s new heights

Coinbase’s recently priced 0.25% convertible notes due 2030 hit a new outright high on Thursday after only recently setting a new outright low.

The 0.25% convertible notes jumped 5 points outright with stock up almost 6% in intraday activity.

The notes were trading at 106 versus a stock price of $268 early in the session, according to a market source.

The notes were changing hands at 106.375 versus a stock price of $269 in the late afternoon.

There was $25 million in reported volume.

Coinbase’s stock traded to a low of $256.27 and a high of $276.38 before closing at $262, up 1.99%.

The 0.25% convertible notes traded to a fresh outright low at a 94-handle on Tuesday with crypto names under pressure amid the pullback in Bitcoin.

However, they rebounded to pop above par on Wednesday.

While volatile outright, the notes were largely moving in line with stock, sources said.

MicroStrategy gains

MicroStrategy’s convertible notes were on the rise alongside stock with the most recently priced 0.875% convertible notes due 2031 briefly returning to par.

The 0.875% notes were up 3 points outright as stock rose more than 9% in early trade.

They were trading at par versus a stock price of $1,614 early in the session, according to a market source.

However, the notes came in as stock gave back some gains and were trading at 98.75 in the late afternoon.

There was $22 million in reported volume.

The 0.625% convertible notes due 2030 were up 6 points outright to trade at 130.25 early in the session and 130.625 in the late afternoon.

There was $19 million in reported volume.

The 0% convertible notes due 2027 jumped 10 points outright to 136.875 early in the session and were trading at 132.625 in the late afternoon.

There was $9 million in reported volume.

MicroStrategy’s stock traded to a low of $1,581.02 and a high of $1,704.36 before closing at $1,599.29, an increase of 3.41%.

Guess? pops

Guess?’s 3.75% convertible notes due 2028, an off-the-run issue that rarely trades in volume, saw an explosion of activity on Thursday as stock popped after earnings.

The 3.75% notes added 18 points outright with stock up over 20%.

They were trading at 137.625 versus a stock price of $31.75 in the late afternoon.

There was $12 million in reported volume.

Guess?’s stock traded to a low of $30.56 and a high of $32.22 before closing at $31.32, up 20.69%.

Stock popped after the clothing and fashion retailer posted a large earnings beat.

Guess? reported earnings per share of $2.01 versus analyst expectations of $1.57. Revenue was $891.05 million versus analyst expectations of $854.64 million.

Mentioned in this article:

Coinbase Global, Inc. Nasdaq: COIN

Guess? Inc. NYSE: GES

MicroStrategy Inc. Nasdaq: MSTR

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