Affirm convertibles gain in active trading; Insulet pops on FDA nod; Lucid down again

By Abigail W. Adams

Portland, Me., Jan. 28 – It was another volatile day in the convertibles secondary space with equity indexes in the red at the start of the session, mixed mid-session and surging into the close.

The Dow Jones industrial average closed the day up 565 points, or 1.65%, the S&P 500 index closed up 2.43%, the Nasdaq Composite closed up 3.13% and the Russell 2000 index closed up 1.93%.

“This market is schizophrenic,” a source said.

While there was an active start to the day with $102 million in reported convertible bond trading volume about one hour into the session, activity petered out as the session progressed with $445 million in reported volume about one hour before the market close.

Holders were using the strength in equities as an opportunity to offload some positions, sources said.

Affirm Holdings Inc.’s 0% convertible notes due 2026 were among the top traded issues during Friday’s session with the notes gaining on an outright basis as stock jumped double digits.

Insulet Corp.’s 0.375% convertible notes due 2026 rose on an outright and dollar-neutral basis as stock popped following FDA approval for one of the company’s devices.

Affirm’s and Insulet’s stocks were among the largest gainers of Friday’s session.

However, Lucid Group Inc.’s 1.25% convertible notes due 2026 continued their losing streak with the notes down again on an outright and dollar-neutral basis.

Affirm in focus

Affirm’s 0% convertible notes due 2026 were the top traded issue of Monday’s session as the company’s stock bounced off its lows.

The 0% convertible notes rose 3.5 points outright with stock up more than 16%.

The notes were changing hands at 76.5 in the late afternoon, according to a market source.

Affirm’s stock traded to a low of $50.78 and a high of $59.90 before closing the day at $59.71, an increase of 17.06%.

Stock surged after a DA Davidson analyst upgraded the fintech company to “buy” from “neutral” and raised the price target to $75.

Insulet pops

Insulet’s 0.375% convertible notes due 2026 jumped as stock surged following FDA approval for one of the company’s products.

The 0.375% notes rose about 8 points outright with stock up 18%.

The notes were changing hands at 116.5 versus a stock price of $212.97 early in the session, a source said.

They were changing hands at 118 in the late afternoon.

The notes expanded about 1 point dollar-neutral on the move up.

Insulet’s stock traded to a high of $230.59 and a low of $211.20 before closing the day at $230.59, an increase of 18.37%.

The medical device company’s stock popped after it announced the U.S. Food and Drug Administration had approved its automated insulin delivery system.

Lucid down again

Lucid’s 1.25% convertible notes due 2026 continued their downward spiral in active trading on Friday.

The notes were off another 3 points outright with stock down another 5%.

They were changing hands at 79.375 versus a stock price of $25.67 early in the session.

However, the notes regained some lost ground on an outright basis and closed the day wrapped around 80.

The notes contracted another 1 point dollar-neutral, a source said.

However, considering the amount the stock has dropped over the past two sessions, some sources were surprised it did not contract more.

Lucid’s stock traded to a low of $25.63 and a high of $28.43 before closing the day at $27.15, a decrease of 5.40%.

Stock has dropped almost 25% over the past week with 19% of losses seen over the past two sessions.

Lucid’s stock was taking a hit alongside other electric vehicle manufacturers after Tesla reported earnings and warned of production delays due to chip shortages and supply chain issues.

Mentioned in this article:

Affirm Holdings Inc. Nasdaq: AFRM

Insulet Corp. Nasdaq: PODD

Lucid Group Inc. Nasdaq: LCID

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