DISH convertibles in focus on renewed merger talk; Coupa, Lucid gain; Affirm active

By Abigail W. Adams

Portland, Me., Jan. 12 – It was another whipsaw day in the convertibles secondary space on Wednesday with equity indexes mixed following the release of the closely watched Consumer Price Index report.

While the report indicated the fastest growth of U.S. consumer prices since 1982, the 7% year-over-year increase in December was widely anticipated.

Equity markets surged at the open, but they pared their gains as the session progressed and closed the day mixed.

The Dow Jones industrial average closed the day up 38 points, or 0.11%, the S&P 500 index closed up 0.28% and the Nasdaq Composite closed up 0.23%.

However, the Russell 2000 index closed the day down 0.82%.

The 10-year Treasury yield closed the day largely flat at 1.746%.

There was about $600 million in reported convertibles trading volume about one hour before the market close.

DISH Network Corp.’s 0% convertible notes due 2025 were in focus with the notes making large gains on an outright and dollar-neutral basis on renewed talk of a merger with DirecTV.

Coupa Software Inc.’s convertible notes were also making gains in active trading.

Affirm Holdings Inc.’s 0% convertible notes due 2026 continued to see heavy volume although with little movement in price.

However, Lucid Group Inc.’s 1.25% convertible notes due 2026 were on the rise in active trading.

DISH in focus

DISH’s 0% convertible notes due 2025 were the name of the day on Wednesday with the notes making large gains on an outright and dollar-neutral basis.

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

The notes were changing hands at 107.5 bid, 108 offered early in the session.

They continued to climb as the session progressed and were trading at 108.5 versus a stock price of $36.83 in the late afternoon.

The notes expanded about 1 point dollar-neutral on the move up, sources said.

DISH’s 3.375% convertible notes due 2026 were also active. The notes gained 1 point outright to trade at 97.375 in the late afternoon.

There was $10 million in reported volume.

DISH’s stock traded to a low of $35.80 and a high of $37.28 before closing the day at $36.37, an increase of 2.8%.

Stock jumped on news that DirecTV and DISH were once again discussing a potential merger of their pay-TV business units.

The merger was attempted nearly two decades ago but did not win approval from regulators on antitrust concerns, TheStreet reported.

The deal would be a credit positive for DISH, a source said.

Coupa gains

Coupa’s convertible notes were active and making gains on Wednesday as stock came in after surging over the past two sessions.

The software company’s 0.375% convertible notes due 2026 gained about 0.625 point outright and the 0.125% convertible notes due 2025 gained about 0.375 point outright with stock off more than 1%.

The 0.375% notes were changing hands at 93.875 versus a stock price of $153.73.

There was about $20 million in reported volume.

The 0.125% convertible notes due 2025 were trading at 120.625 versus a stock price of $152.87.

There was about $12 million in reported volume.

Coupa’s stock traded to a high of $157 and a low of $148.56 before closing the day at $150.84, a decrease of 1.31%.

The cloud-based Business Spend Management company presented at the Needham Growth Conference on Tuesday.

While stock was off on Wednesday, it has risen more than 9% since last Friday’s close.

Affirm active

Affirm’s 0% convertible notes due 2026 remained active on Wednesday although with little movement in price.

The 0% convertible notes were changing hands at 83.75 versus a stock price of $80.12, according to a market source.

While stock remained volatile, the notes were largely unchanged.

There was $25 million in reported volume.

Affirm’s stock traded to a high of $84.68 and a low of $78.64 before closing the day at $78.79, a decrease of 2.76%.

Lucid gains

Lucid’s 1.25% convertible notes due 2026 improved on a dollar-neutral basis on Wednesday after getting crushed earlier in the week.

The 1.25% notes were changing hands at 101.75 versus an equity price of $45.11 in the late afternoon.

They improved about 0.375 point dollar-neutral, a source said.

Lucid’s stock traded to a high of $47.59 and a low of $44.03 before closing the day largely flat at $45.43, a decrease of 0.088%.

While the notes have managed to stay above their discounted issue price of 99.5 over the past week, they contracted as much as 2 points dollar-neutral during Monday’s session alone.

Mentioned in this article:

Affirm Holdings Inc. Nasdaq: AFRM

Coupa Software Inc. Nasdaq: COUP

DISH Network Corp. Nasdaq: DISH

Lucid Group Inc. Nasdaq: LCID

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