MongoDB convertibles eyed; DocuSign active post-earnings; Opendoor gains continue

By Abigail W. Adams

Portland, Me., Sept. 3 – The convertibles secondary space saw a slow end to the week with a burst of activity in the morning trailing off in the afternoon as many launched the Labor Day weekend early.

There was $107 million in reported volume about one hour into the session and $365 million on the tape heading into the market close.

Equities were choppy following the highly anticipated nonfarm payrolls report, which was expected to give an indication of future Federal Reserve policy.

The payroll report showed slower job growth than expected with the future of the Federal Reserve’s timeline for tapering being called into question.

While the Dow Jones industrial average remained in the red throughout the session, the S&P 500 index and Nasdaq Composite wavered between gains and losses with a slower taper timeline considered a positive for growth stocks.

The Dow closed the day down 75 points, or 0.21%, the S&P 500 closed the day down 0.03% and the Nasdaq Composite closed the day up 0.21% after a strong rebound from a red morning.

While the overall market was mixed, positive earnings continued to bolster the stocks of some convertibles issuers, which sparked activity in some off-the-run names.

MongoDB Inc.’s 0.25% convertible notes due 2026 were in focus on Friday with the deep-in-the-money notes shooting higher above double par as stock surged following earnings.

DocuSign Inc.’s 0% convertible notes due 2024 were also on the rise on an outright basis as stock gained post-earnings.

Opendoor Technologies Inc.’s 0.25% convertible notes due 2026 continued their upward momentum with the notes setting a new outright level and improving dollar-neutral as stock continued its run.

MongoDB in focus

MongoDB’s 0.25% convertible notes due 2026 were in focus on Friday with the notes shooting higher above double par as stock surged following earnings.

The 0.25% convertible notes climbed more than 20 points outright with stock up over 25%.

The notes were changing hands at 234.625 versus a stock price of $487.84 early in the session, according to a market source.

They traded as high as 243.5 in the late afternoon.

There was about $40 million in reported volume, making the notes the top trader of the day.

The notes essentially act as an equity surrogate, a source said.

The software company’s stock traded to a high of $508.97 and a low of $458.54 before closing the day at $507.41, an increase of 26.33%.

MongoDB reported a loss per share of 24 cents versus analyst expectations for a loss per share of 41 cents.

Revenue was $198.7 million versus analyst expectations for revenue of $202 million.

DocuSign’s earnings

DocuSign’s 0% convertible notes due 2024 were also on the rise on an outright basis as stock rose post-earnings.

The 0% notes were up about 2 points outright with stock up more than 5%.

They were changing hands at 109.75 versus a stock price of $307.78 early in the session and were wrapped around 110 heading into the market close.

While up on an outright basis, the notes were largely unchanged dollar-neutral.

“They were rich to begin with,” a source said.

DocuSign’s stock traded to a low of $295.98 and a high of $314.70 before closing the day at $310.05, an increase of 5.26%.

DocuSign reported earnings per share of 47 cents versus analyst expectations for earnings per share of 40 cents.

Revenue was $511.8 million versus analyst expectations for revenue of $488.7 million.

Opendoor gains continue

Opendoor’s 0.25% convertible notes due 2026 continued their upward momentum on Friday.

The notes hit a new outright level and improved on a dollar-neutral basis.

They rose more than 2 points outright with stock up about 3%.

The notes were changing hands at 117.75 versus a stock price of $18.52 early in the session.

They were changing hands just shy of 118 heading into the market close.

Opendoor’s stock traded to a low of $18.44 and a high of $19.26 before closing the day at $19.18, an increase of 3.28%.

Mentioned in this article:

DocuSign Inc. Nasdaq: DOCU

MongoDB Inc. Nasdaq: MDB

Opendoor Technologies Inc. Nasdaq: OPEN

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