Convertibles trading volume light; Karyopharm in focus; Nio gains outright; Gol Linhas jumps

By Abigail W. Adams

Portland, Me., July 5 – The convertible secondary space was moving at a crawl on Friday with many still celebrating the Independence Day holiday.

Trading volume was the lightest it had been all week with $25 million on the tape a little over one hour into Friday’s session and about $100 million in reported volume in the mid-afternoon.

Karyopharm Therapeutics Inc.’s 3% convertible notes due 2025 accounted for the lion’s share of trading activity during Friday’s session.

The notes jumped as stock continued to rally on the heels of FDA approval for one of its products.

Nio Inc.’s 4.5% convertible notes due 2024 were again active with the notes posting gains on an outright basis as the company’s equity continued its upward momentum.

While volume was light, GOL Linhas Aereas Inteligentes SA’s 3.75% convertible notes due 2024 also saw a large outright movement as equity soared following a report of strong travel demand in June.

Karyopharm in focus

Karyopharm’s 3% convertible notes due 2025 accounted for the lion’s share of trading volume on Friday as the convertible notes jumped alongside stock following FDA approval for a new pharmaceutical.

The 3% convertible notes jumped more than 23 points outright to close Friday at 87.75.

More than $20 million of the bonds were on the tape by the mid-afternoon, a market source said.

The 3% notes are a small, illiquid issue with $172.5 million outstanding.

The bonds were largely moving in line with equity, which saw huge gains early in the session on news of FDA approval for its multiple myeloma treatment Xpovio, according to a market source.

Karyopharm stock traded as high as $10.60 early in the session, an increase of almost 20%. However, stock sold off into the afternoon and closed the day at $8.81, a decrease of 0.97%.

Stock saw more than 37x its average trading volume with 38 million shares in play during Friday’s session versus the 1.4 million 50-day average.

While the convertible notes were slow to trade, stock also skyrocketed during Wednesday’s abbreviated session after the FDA approval was announced. Stock gained 36% on Wednesday due to the news.

Nio’s gains continue

Nio’s 4.5% convertible notes were again posting gains on an outright basis on Friday as the Shanghai-based electric car manufacturer’s stock continued to get lifted.

The 4.5% notes gained about 3 points outright. They were changing hands at 55 early in Friday’s session and were largely range bound between 54 and 56 throughout the afternoon, sources said.

The notes saw about $3 million in reported volume during Friday’s session.

Nio’s American Depositary Shares were changing hands at $3.22, an increase of 2.87%, shortly before 11 a.m. ET.

The notes have been active and posting gains on an outright basis throughout the week as the company’s equity has been on the rise.

They traded down to an all-time low of 48.75 on June 28, according to Trace data.

The company’s equity and convertible notes were lifted in the wake of the G-20 summit and thawing trade relations between the U.S. and China.

Tesla’s sales beat on Wednesday also helped to lift Nio with investors showing more interest in the name on the heels of Tesla’s report, a market source said.

Tesla beat analyst expectations for second quarter sales earlier in the week, signaling solid demand for electric vehicles.

Gol Linhas jumps outright

Gol Linhas’ 3.75% convertible notes due 2024 saw large gains on an outright basis as the Sao Paulo-based provider of airline services’ equity soared on Friday.

The notes climbed 12.25 points outright to close the day just north of 121, according to a market source. They closed Wednesday just shy of 109.

Gol Linhas stock soared on Friday, closing the day at $21, an increase of 17.19%. Stock was on the rise following a report about strong travel demand in June.

Mentioned in this article:

GOL Linhas Aereas Inteligentes SA NYSE: GOL

Karyopharm Therapeutics Inc. Nasdaq: KPTI

Nio Inc. NYSE: NIO

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