Morning Commentary: Airbnb convertible notes active post earning; markets see rebound

By Abigail W. Adams

Portland, Me., Aug. 4 – It was a slow start to the day in the convertibles secondary space on Friday as equity markets rebounded on the heels of the latest U.S. nonfarm payrolls report, which gave a mixed view of the labor market.

While job growth came in below expectations in a sign of a cooling labor market, wage growth came in higher than anticipated, leaving market players guessing about the Fed’s next rate move.

The Dow Jones industrial average was up 192 points, or 0.54%, the S&P 500 index was up 0.50%, the Nasdaq Composite index was up 0.64% and the Russell 2000 index was up 0.36% shortly before 11 a.m. ET.

There was $49 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

Airbnb Inc.’s 0% convertible notes due 2026 were the exception with the notes active but little changed post-earnings.

The 0% convertible notes were changing hands at 88.75 versus a stock price of $142 early in the session.

There was $7 million in reported volume.

Airbnb’s stock was trading at $143.06, an increase of 1.54%, shortly before 11 a.m. ET.

Airbnb posted a large earnings beat on Thursday with earnings per share of 95 cents versus analyst expectations for earnings per share of 79 cents.

Revenue was $2.48 billion versus analyst expectations for revenue of $2.42 billion.

While earnings were positive, the stock made few gains on the news and remains down about 7% on the week.

However, stock saw a massive run up leading into its earnings report and hit a 52-week high of $154.95 on Monday.

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