Morning Commentary: Western Digital convertibles in focus; secondary trading quiet

By Abigail W. Adams

Portland, Me., June 14 – The convertibles secondary space was relatively quiet early in Monday’s session with few names seeing concentrated trading activity albeit with one exception.

Western Digital Corp.’s 1.5% convertible notes due 2024 were in focus early Monday with the investment-grade convertible notes accounting for the lion’s share of trading volume in the secondary space.

The 1.5% notes were changing hands at 109 versus an equity price of $74.87 a little more than one hour after the opening bell, according to a market source.

There was $20 million in reported volume. Total reported volume for convertible bonds was $92 million with few other names seeing more than $5 million in reported volume.

Western Digital’s stock traded as high as $75.51 shortly after the opening bell before coming in to trade at $74.32, a decrease of 0.62%, shortly before 11 a.m. ET.

Stifel Nicolaus raised its price target for the stock to $110 from $98 on Monday, which may have been a catalyst for the trading activity, a source said.

Western Digital’s stock has climbed more than 45% over the past six months.

The hard disk drive manufacturer and data storage company has benefited from the crypto craze with the company’s high-capacity disk drives needed to farm a new cryptocurrency called Chia, which has been touted as a greener alternative to Bitcoin because it utilizes disk storage space for mining as opposed to processing power.

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