Etsy convertibles on tap; Li Auto gains; Beyond Meat up; Coinbase, MicroStrategy active

By Abigail W. Adams

Portland, Me., June 7 – The convertibles primary market returned to action on Monday with a large offering from a serial issuer on deck.

Etsy Inc. plans to price $1 billion of seven-year convertible notes after the market close on Tuesday with price talk for a coupon of 0.25% to 0.75% and an initial conversion premium of 42.5% to 47.5%, according to a market source.

Goldman Sachs & Co. LLC (lead left), Citigroup Global Markets Inc and J.P. Morgan Securities LLC are joint bookrunners for the Rule 144A offering, which does not carry a greenshoe.

The offering is the first new deal of June and is slated to be one of the largest of the second quarter.

Meanwhile, it was an uneventful day in the secondary space with equities trading largely sideways and few names on the tape.

Convertible bonds saw $47 million in reported volume one hour into the session and $498 million in reported volume by the market close, sources said.

Li Auto Inc.’s 0.25% convertibles due 2028 were the top traders of Monday’s session with the notes continuing to gain on an outright and dollar-neutral basis.

Beyond Meat Inc.’s 0% convertible notes due 2027 were also posting gains on an outright and dollar-neutral basis as stock again edged higher.

Coinbase Global Inc.’s 0.5% convertible notes due 2026 and MicroStrategy Inc.’s 0% convertible bonds due 2027 were active with Bitcoin 2021 underway in Miami.

MicroStrategy’s 0% convertible notes remained under pressure as the company prepared a junk bond offering with proceeds to be used to purchase more Bitcoin.

CyberArk Software Ltd.’s 0% convertible notes due 2024, an off-the-run name that rarely makes it onto the tape, also saw renewed attention on Monday with the notes gaining on an outright basis.

Upward momentum

Li Auto’s 0.25% convertibles due 2028 continued their upward momentum in active trading on Monday.

The notes were up about 5 points outright with stock up over 4%.

They were changing hands just shy of 116 versus an equity price of $26.86 in the late afternoon.

The 0.25% notes rose another 0.5 point dollar-neutral, a source said.

The notes saw more than $16 million in reported volume, making the issue the most actively traded of Monday’s session.

Li Auto’s American Depositary Shares traded to a low of $25.59 and a high of $27.24 before closing the day at $26.68, an increase of 4.06%.

Li Auto’s equity and convertible bonds have been on a tear since the Beijing-based electric vehicle manufacturer reported earnings about two weeks ago.

Beyond Meat’s 0% convertible notes due 2027 also continued their upward momentum as the latest meme stock’s price was pushed higher during Monday’s session.

The 0% convertible notes rose 2.5 points outright with stock up more than 4%.

They were changing hands at 102.875 versus a stock price of $153.32 in the late afternoon, according to a market source.

The notes gained another 0.25 point dollar-neutral, a source said.

Beyond Meat’s stock traded to a low of $145.55 and a high of $156.20 before closing the day at $152.44, an increase of 4.73%.

The Bitcoin trade

Coinbase’s 0.5% convertible notes due 2026 and MicroStrategy’s 0% convertible notes due 2027 were active during Monday’s session with an international Bitcoin conference underway in Miami.

Coinbase’s 0.5% convertible notes continued to trade above their discounted issue price.

The 0.5% notes, which priced at 99, were changing hands at 100.5 versus a stock price of $232.05 in the late afternoon, according to a market source.

There was about $11 million in reported volume during Monday’s session.

Coinbase’s stock traded to a low of $226.50 and a high of $232.56 before closing the day at $231.45, an increase of 1.16%.

MicroStrategy’s 0% convertible notes due 2027 continued to struggle with the notes down another 6 points outright as stock dropped 3%.

The 0% convertible notes were changing hands at 67.5 versus an equity price of $471.75 in the late afternoon.

MicroStrategy’s 0.75% convertible notes due 2026 were also down about 6 points outright to trade at 135.

MicroStrategy’s stock traded to a high of $488.55 and a low of $464.07 before closing the day at $469.81, a decrease of 3.07%.

MicroStrategy’s convertible notes were active and trading off as the business intelligence company prepped a high-yield bond offering with proceeds to be used to purchase more Bitcoin.

The company plans to sell $400 million seven-year secured notes on Tuesday with initial guidance for a yield of 6.25% to 6.5%, Prospect News reported.

Proceeds from MicroStrategy’s convertible bonds were also used to purchase Bitcoin.

While Bitcoin supporters gathered to discuss the future of the cryptocurrency at Bitcoin 2021, the conference did little to break Bitcoin out of its rout.

Bitcoin was down about 4% to $34,553 shortly before 5 p.m. ET.

CyberArk on the tape

CyberArk’s 0% convertible notes due 2024, a name which rarely makes an appearance on the tape, saw some action on Monday.

The 0% notes gained 1 point outright with stock up more than 2% early in Monday’s session.

The 0% notes were changing hands at 107.75 versus a stock price of $128.12 early in the session.

However, activity in the name petered out as the session progressed.

The information security company’s stock traded to a high of $130.62 and a low of $125.97 before closing the day at $130.46, an increase of 3.56%.

Investors have turned bullish on cyber-security firms in recent weeks following an upswing in ransomware attacks.

Mentioned in this article:

Beyond Meat Inc. Nasdaq: BYND

Coinbase Global Inc. Nasdaq: COIN

CyberArk Software Ltd. Nasdaq: CYBR

Etsy Inc. Nasdaq: ETSY

Li Auto Inc. Nasdaq: LI

MicroStrategy Inc. Nasdaq: MSTR

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