HomeAway expands on takeout news; FireEye drops after revenue disappointment

By Rebecca Melvin

New York, Nov. 5 – HomeAway Inc.’s 0.125% convertible bond was the centerpiece of trade in the convertibles market on Thursday, and that paper jumped on an outright basis and expanded on swap after news that Expedia Inc. has agreed to buy the vacation rental site for $3.9 billion in cash and stock, a New York-based trader said.

HomeAway’s convertible was the single-most actively traded bond during the session, according to Trace data.

FireEye Inc. was also in focus after its underlying shares collapsed on news that the Milpitas, Calif.-based network security company missed revenue expectations for the third quarter and provided weaker guidance for the current quarter.

Both FireEye convertible bonds dropped on an outright basis amid a 23% plunge in the underlying common shares. But it wasn’t known how they performed relative to shares on a swap basis.

Elsewhere, earnings news drove other trading action as well. Alere Inc.’s 3% convertibles due 2016 traded at 106.2, according to Trace data, as shares fell 9% after the Waltham, Mass.-based diagnostics and services company missed earnings and revenue estimates for its third quarter and guided full-year earnings and revenue below consensus.

Moving in the opposite direction was MercadoLibre Inc.’s 2.25% convertibles due 2019, which gained nearly 7 points to 115 after the Latin American e-commerce company reported better-than-expected earnings and revenue for its third quarter. Shares jumped $9.43, or 9%, to $116.43.

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