Morning Commentary: Lucid prices at discount, trades down; Everbridge tanks outright

By Abigail W. Adams

Portland, Me., Dec. 10 – It was an active morning in the secondary space with Lucid Group Inc.’s $1.75 billion offering making its aftermarket debut and outstanding issues seeing huge stock swings.

Lucid Group’s new 1.25% convertible notes due 2026 were “sloppy” in secondary action with the notes well below their discounted issue price.

While new paper from Lucid dominated activity in the secondary space, Everbridge Inc.’s convertible notes were active with the notes tanking outright but expanding dollar-neutral as stock got slaughtered.

Lucid’s discount

Lucid priced $1.75 billion of five-year convertible notes after the market close on Thursday at 99.5 with a coupon of 1.25% and an initial premium of 50%, according to a market source.

Pricing came at the cheap end of talk for a coupon of 0.75% to 1.25% and an initial conversion premium of 50% to 55%, according to a market source.

The discounted offer price was not included in initial price talk.

The new 1.25% convertible notes were trading below their discounted issue price on debut.

The notes were changing hands in a range of 97.75 to 98.5 with stock up early in the session, a source said.

However, the notes moved lower as stock turned negative as the session progressed.

They were changing hands at 97 shortly before 11 a.m. ET.

The notes were contracting dollar-neutral.

Lucid’s stock traded to a high of $39.08 early in the session. However, stock turned negative and was changing hands at $36.17, a decrease of 0.96%, shortly before 11 a.m. ET.

Lucid Group is a Newark, Calif.-based electric vehicle manufacturer.

Everbridge tanks outright

Everbridge’s convertible notes were active and tanking on an outright basis as the Burlington, Mass.-based software company’s stock got slaughtered.

The 0% convertible notes due 2026 sank 20 points outright.

They were changing hands at 80.25 versus a stock price of $62.97 early in the session, sources said.

On a hedge basis, sources saw the notes expanding 1 point to 2.5 points on the move down.

However, on a value basis the notes contracted about 4 points, a source said.

Everbridge’s 0.125% convertible notes due 2024 sank 30 points outright.

The notes traded down to 92 early in the session.

While the notes tanked outright, they improved 7 points to 8 points on hedge, a source said.

The large expansion was the result of the notes’ short-duration.

Everbridge’s stock traded down to $60.58, a decrease of 47.48%, shortly before 11 a.m. ET.

Stock tanked after the surprise resignation of the company’s CEO.

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