ServiceNow convertible notes fall after company reports loss on higher revenue; SanDisk up

By Stephanie N. Rotondo

Seattle, Jan. 28 – A convertible bond trader said ServiceNow Inc. was dominating secondary trading on Thursday.

“It’s the only bond trading,” he said. “If you aren’t trading that, you’re not doing anything.”

The action comes after the cloud computing company released earnings late Wednesday. While revenues jumped nearly 50% for the year and fourth quarter, the company still reported a loss.

The trader saw the 0% convertible notes due 2018 at 103.5 against a stock price of $58.50, noting that the equity was off $15 in early trading.

“They’ve gotten better bid over the course of the day,” he added.

At midday, a trader pegged the issue at 107.8 versus a stock price of $63.59. By the close, the convertibles were quoted in a 108 to 108.375 context, while the stock had recovered from its intraday lows, closing off $11.80, or 15.66%, at $63.57.

For the fourth quarter, revenue was $285.7 million, a gain of 44% year over year. Net loss came to $37.4 million, or 23 cents per share.

SanDisk Corp.’s convertibles were also active yet again as the market digested the company’s earnings release from Wednesday.

The 1.5% convertible notes due 2017 traded up to 145 from 140, according to a market source. The 0.5% convertible notes due 2020 ended at 101.5 bid, 101.875 offered, up from a range of 99 to par previously.

The equity finished at $67.25, up $3.04, or 4.73%.

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