Twitter in focus post-earnings; Airbnb convertibles below par; Enphase Energy active

By Abigail W. Adams

Portland, Me., April 30 – It was a quiet close to a relatively quiet week in the convertibles secondary space.

Earnings and stock moves were the main drivers of trading activity with equities selling off after broaching fresh records earlier in the week.

The Dow Jones industrial average closed the day down 185 points, or 0.54%; the S&P 500 closed the day down 0.72%; and the Nasdaq composite finished down 0.85%.

Small cap stocks were among the weakest performers during Friday’s session with the Russell 2000 closing the day down 1.26%.

Twitter Inc.’s 0% convertible bonds due 2026 dominated the tape on Friday with the notes down outright but expanding dollar-neutral as stock tanked following earnings.

Spirit Airlines Inc.’s 1% convertible notes due 2026 remained active their second day in the secondary space.

However, the notes were largely unchanged.

After only recently popping above par, Airbnb Inc.’s 0% convertible notes due 2026 closed the week below as stock sold off alongside the broader market.

Enphase Energy Inc.’s convertible notes were again trading lower on an outright basis but gaining dollar-neutral as stock continued its downward spiral.

Twitter’s earnings

Twitter’s 0% convertible bonds due 2026 dominated the tape with the notes down outright but improved dollar-neutral as stock tanked following disappointing earnings.

The 0% notes dropped 3 points outright with stock down more than 12%.

The notes traded down to a 91-handle.

However, the notes improved 0.375 point dollar-neutral on the move down.

The notes trade with a light delta, sources said.

Twitter’s stock traded to a high of $57.63 and a low of $55.05 before closing the day at $55.22, a decrease of 15.16%.

Twitter beat on both the top and bottom lines in its first-quarter earnings report.

Twitter reported earnings per share of 16 cents versus analyst expectations for earnings of 14 cents.

Revenue also topped estimates at $1.04 billion versus the $1.03 billion expected.

However, stock was trading off on weak guidance and disappointing user growth.

Spirit day two

Spirit Airlines’ 1% convertible notes due 2026 remained active their second day in the secondary space.

However, the notes were largely unchanged, a source said.

The 1% notes continued to trade around 102.5.

Spirit Airlines’ stock traded to a high of $36 and a low of $35.03 before closing the day at $35.82, an increase of 0.51%.

Airbnb below par

Airbnb’s 0% convertible notes due 2026 dropped back below par as stock sold off alongside the broader market on Friday.

The 0% convertible notes were changing hands at 99.5 in the late afternoon.

However, they improved 0.25 point dollar-neutral.

Airbnb’s stock traded to a high of $176.45 and a low of $172.01 before closing the day at $172.71, a decrease of 2.8%.

The 0% notes traded as high as 101 earlier in the week as stock improved after stock hit a recent low of $167 the previous week.

Enphase in focus

Enphase Energy’s convertible notes were again trading lower on an outright basis as stock continued its descent post-earnings.

The 0% convertible notes due 2026 traded down to 91 in the mid-afternoon, a source said.

However, they improved 0.375 point on a dollar-neutral, or hedged, basis, a source said.

While less active, Enphase Energy’s 0% convertible notes due 2028 were also trading off on an outright basis with the notes closing Friday at 88.375.

Enphase Energy’s stock traded to a high of $144.34 and a low of $139.11 before closing the day at $139.25, a decrease of 2.89%.

Stock has dropped more than 18% since reporting earnings post-close on Tuesday.

While the company beat on both the top and bottom lines, forward guidance was weak.

Mentioned in this article:

Airbnb Inc. Nasdaq: ABNB

Enphase Energy Inc. Nasdaq: ENPH

Spirit Airlines Inc. NYSE: SAVE

Twitter Inc. NYSE: TWTR

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