Xometry convertibles down outright, up on swap; Wolfspeed, Booking active; Wayfair down

By Abigail W. Adams

Portland, Me., Feb. 2 – The convertibles secondary space saw another active session on Wednesday with one new deal making its aftermarket debut.

Xometry Inc. priced $250 million of five-year convertible notes after the market close on Tuesday.

The deal played to tepid demand and hit the secondary space on a mixed day for equities with the small cap index leading losses.

The Dow Jones industrial average closed the day up 224 points, or 0.63%, the S&P 500 index closed up 0.94%, the Nasdaq Composite closed up 0.50%.

However, the Russell 2000 index closed the day down 1.02%.

Investors resumed dumping the stocks of unprofitable companies following the latest batch of earnings, a source said.

There was $700 million in reported convertible bond trading volume about one hour before the market close.

Xometry fell into the category of stocks that were under pressure during Wednesday’s session, and the new convertible notes traded down on an outright basis. However, they were performing well on swap.

Wolfspeed Inc.’s new 0.25% convertible notes due 2028 continued to perform well in active trading.

Booking Holdings Inc.’s 0.75% convertible notes due 2025 (A3/A-) saw heavy volume during Wednesday’s session.

Wayfair Inc.’s 0.625% convertible notes due 2025 also saw some activity with the notes trading down with stock under pressure.

Xometry hits secondary

Xometry priced $250 million of five-year convertible notes after the market close on Tuesday at par at the cheap end of talk with a coupon of 1% and an initial conversion premium of 27.5%.

Price talk was for a coupon of 0.5% to 1% and an initial conversion premium of 27.5% to 32.5%.

The notes hit the secondary space on a rough day for small cap companies and dropped below par with stock in the red.

The mid-point of the bid, ask spread was 99 early in the session, a source said. They were changing hands at 98.25 versus a stock price of $42.60 in the late afternoon.

However, while the notes were down on an outright basis, they were performing well on swap.

The notes were poised to close the day with a 0.5 point expansion, a source said.

There was $43 million in reported volume with lots of swap trades on the tape.

Xometry’s stock traded to a high of $43.60 and a low of $41.81 before closing the day at $42.56, a decrease of 3.29%.

Wolfspeed day two

Wolfspeed’s 0.25% convertible notes due 2028 continued to perform well in the secondary space with the notes holding on to the large gains seen during the previous session.

The 0.25% notes continued to trade on a 104-handle with stock off during Wednesday’s session.

They were changing hands at 104.125 versus a stock price of $94.82 in the late afternoon.

There was $16 million in reported volume.

Wolfspeed’s stock traded to a high of $98.25 and a low of $92.50 before closing the day at $96.10, a decrease of 1.39%.

The notes played to heavy demand during bookbuilding and jumped on their aftermarket debut, trading as high as 105.25 and expanding 3.5 to 4 points dollar-neutral.

Booking active

Booking Holdings’ 0.75% convertible notes due 2025 saw heavy volume during Wednesday’s session.

The notes traded up to 151.375 with stock flat early in the session.

However, they traded down to 150.125 as stock turned negative as the session progressed.

There was $45 million in reported volume.

Booking’s stock traded to a high of $2,487.44 and a low of $2,438.07 before closing the day at $2,440.98, a decrease of 1%.

Wayfair down

Wayfair’s 0.625% convertible notes due 2025 were active on Wednesday with the notes moving lower alongside stock.

The 0.625% notes were off 1.25 points outright with stock down 9%.

The notes were changing hands at 87.25 versus a stock price of $150.40 in the late afternoon.

Wayfair’s stock traded to a high of $163.07 and a low of $146.38 before closing the day at $147.31, a decrease of 9.42%.

Wayfair’s stock was dragged down with several other e-commerce companies, which was attributed to PayPal Inc.’s earnings report and warnings of supply chain issues and problems with cross-border transactions.

Mentioned in this article:

Booking Holdings Inc. Nasdaq: BKNG

Wayfair Inc. NYSE: W

Wolfspeed Inc. NYSE: WOLF

Xometry Inc. Nasdaq: XMTR

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