Midday Commentary: Endo Health looks better on stock surge; Tesla active ahead of earnings news

By Rebecca Melvin

New York, Nov. 5 - Endo Health Solutions Inc.'s convertibles traded strongly as the underlying shares surged early Tuesday on news that the Malvern, Pa.-based specialty health care company is buying Paladin Labs for about $1.5 billion and posted strong earnings.

The Endo Health 1.75% convertible due 2015 "is the name of the day," a New York-based trader said. The bonds traded last at 193.607 versus an underlying share price of $55.86, trading on about a 95% to 96% delta.

"Looks like you did well on this gap higher," the trader said regarding the bond's performance for hedged players.

Tesla Motors Inc.'s convertibles were active again in early trading and pulled back to about even with Monday's close after early strength and ahead of the Palo Alto, Calif.-based electric car maker's quarterly results, which are expected after the market close.

MannKind Corp.'s convertibles were eyed in early action after the Valencia, Calif.-based biopharmaceutical company posted weak results and updated the market on its partnership plans.

The MannKind 5.75% convertibles traded at 97.375 bid, 97.875 offered, and the shorter-dated 3.75% convertibles were seen at 98.25 bid, 99 offered but were not heard to have traded yet. MannKind shares wavered.

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