Tesla Motors’ convertible bonds head higher as analysts speculate on future; EZCorp gains

By Stephanie N. Rotondo

Seattle, July 12 – Tesla Motors Inc. was trading actively – and better – in the convertible bond market on Tuesday.

The gains came as Morgan Stanley analysts speculated on what Elon Musk’s new “secret master plan” could be. In their opinion, Musk could very well be looking at repositioning his auto company into a public transport company – a move the analysts believe the company is well positioned for.

The 1.25% convertible notes due 2021 were trading in an 84.75 to 84.875 context at midday, ultimately closing just north of 85. That compared to a stock price of $226.06, which was up $1.28.

However, the equity did trade off by the bell, ending down 13 cents at $224.65.

The gains also came despite reports that the Securities and Exchange Commission was investigating the company over a potential breach of securities laws. The probe centers on a May 7 crash involving a Tesla vehicle that was driving on auto-pilot. The accident killed the driver.

While Tesla did notify the National Highway Traffic Safety Administration of the incident, it failed to disclose the information to investors.

A trader said EZCorp Inc.’s 2.125% convertible senior notes due 2019 were “trading again” on Tuesday.

He saw the issue moving higher, placing it at 90.5 bid, 90.75 offered against a stock price of $9.50.

The equity closed at $9.66, up 42 cents, or 4.55%.

“That stock continues to rally,” he said.

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