Morning Commentary: SanDisk expands on swap after outlook cut; Synergy Pharma exploring a sale

By Rebecca Melvin

New York, March 26 – SanDisk Corp. was in focus early Thursday, with the convertibles dropping sharply on an outright basis along with shares but jumping on swap after the Milpitas, Calif.-based data storage chip company cut its first-quarter and 2015 revenue outlook and withdrew other forecasts for the same time periods.

SanDisk cut the outlook for the quarter ending March 29 to $1.3 billion from $1.4 billion to $1.45 billion, citing certain product qualification delays, lower-than-expected sales, lower pricing and supply constraints.

The reduction followed a SanDisk warning Jan. 22 that fourth-quarter and full-year revenue would be lower than expected amid supply constraints.

SanDisk’s 0.5% convertibles due 2020 fell about 7.5 points outright to 101.75 in active trade but were quoted up about 2 points on swap, a Connecticut-based trader said.

SanDisk’s 1.5% convertibles due 2017 traded actively and were last seen at 140.87, which was down 23.5 points on an outright basis but also up about 2 points on swap.

SanDisk shares fell $13.65, or 17%, to $67.61.

“That is a big move in the bonds on swap,” said a New York-based trader, who was active in the name.

Elsewhere, Synergy Pharmaceuticals Inc.’s shares popped after word that the New York-based biopharmaceutical company is weighing options including a sale of itself.

A level on Synergy’s 7.5% convertible bonds due 2019 was heard at 135.125 bid, 138.125 offered versus a share price of $4.20, according to a trader.

Synergy shares were last up 31 cents, or 8%, at $4.13.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.