Twitter convertible bonds weaken as turnaround lags; Citrix rises on earnings results

By Stephanie N. Rotondo

Phoenix, July 29 – Twitter Inc.’s convertible bonds were on the decline early Wednesday after management said its turnaround efforts would take more time.

“The stock caught a bid because of the earnings report,” a trader said, noting that the stock had fallen over 10% by mid-morning.

As for the bonds, he saw the 0.25% convertible notes due 2019 trading with an 87 handle and the 1% notes due 2021 trading just north of 86.5.

The bonds were down over 4 and 3 points, respectively.

The equity ended the day at $31.24, off $5.30, or 14.5%.

In its earnings call late Tuesday, Twitter interim chief executive officer Jack Dorsey and chief financial officer Anthony Noto said the social media platform was struggling to sustain growth, attributing the troubles to the platform itself, as well as how it is marketed.

Despite the lack of growth, the company did see an increase in revenue per user and overall results came in better than expected.

For the quarter, Twitter posted a net loss of $136.7 million, or 21 cents per share. That compared to a loss of $144.6 million, or 24 cents per share, the year before.

On an adjusted basis, earnings per share came to 7 cents a share.

Revenue was $502 million.

Analysts polled by Thomson Reuters had expected to see an adjusted loss per share of 4 cents on revenue of $481.3 million.

Citrix rises

In other earnings news, Citrix Systems Inc. was moving up after its numbers beat expectations.

A trader called the 0.5% convertible notes due 2019 up 3 points, trading in a 107 to 108 range.

The stock was meantime up $5.62, or 8.07%, to $75.25.

For the second quarter, Citrix reported net income of $103 million, or 64 cents per share. That compared to income of $53 million, or 31 cents per share, the previous year.

Revenue improved 2% to $797 million.

Looking to the third quarter, Citrix said its revenue target was $780 million to $790 million. Earnings per share were forecast between 46 cents and 49 cents.

In addition to announcing earnings, Citrix said late Tuesday that it had reached an agreement with investor Elliott Management Corp. In June, the investor had called out the company as it saw a need for things such as cost overhauls, selling assets and the recruitment of more talented managers.

Under the agreement, Citrix will add Elliot’s Jesse Cohn to its board and will also begin the search for a new chief executive officer.

Mark Templeton, the current CEO, separately announced his retirement. He will stay on until a replacement is found.

Mentioned in this article:

Citrix Systems Inc. Nasdaq: CTXS

Twitter Inc. Nasdaq: TWTR

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