Morning Commentary: Pluralsight convertibles plunge outright, expand dollar-neutral

By Abigail W. Adams

Portland, Me., Aug. 1 – The convertible secondary space saw an uptick in trading volume on Thursday with $87 million on the tape about one hour into the session.

However, one name dominated activity – Pluralsight Inc.

Pluralsight’s 0.375% convertible notes due 2024 tanked on an outright basis but saw a large dollar-neutral expansion as stock cratered following the online education company’s second-quarter earnings report.

The 0.375% convertible notes dropped more than 18 points outright. They were changing hands at 90.375 early in the session.

However, the notes expanded upwards of 4 points dollar-neutral, a market source said. The notes saw more than $35 million in reported volume early in the session.

Pluralsight stock dropped to $19.84, a decrease of 35.35%, shortly before 11 a.m. ET.

Stock cratered following a mixed earnings report and weak forward guidance.

Pluralsight reported losses per share of 6 cents versus analyst expectations for earnings per share of 14 cents.

However, the company beat on the top line with revenue of $75.9 million versus analyst expectations for revenue of $73.8 million, MarketWatch reported.

Pluralsight projected revenue of $79.5 million to $80 million for the third quarter versus analyst expectations for revenue of $82 million.

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