Morning Commentary: GoPro convertibles price, skyrocket on debut; FireEye in focus

By Abigail W. Adams

Portland, Me., Nov. 20 – The convertibles secondary space opened Friday with the last new deal of the week making its aftermarket debut.

GoPro Inc. priced an upsized $125 million of five-year convertible notes after the market close on Thursday.

While volume was light, the new paper was making large gains on an outright and dollar-neutral basis.

Meanwhile, the secondary space was active early in the session with $109 million in reported volume about one hour after the opening bell.

FireEye Inc.’s 0.875% convertible notes due 2024 were in focus with the notes popping on news that Blackstone’s venture capital firm ClearSky was investing in the company.

GoPro gains

GoPro priced an upsized $125 million of five-year convertible notes after the market close on Thursday at par at the rich end of talk with a coupon of 1.25% and an initial conversion premium of 35%, according to a company news release.

Price talk was for a coupon of 1.25% to 1.75% and an initial conversion premium of 30% to 35%, according to a market source.

The greenshoe was also upsized to $18.75 million.

The initial size of the offering was $100 million with a greenshoe of $15 million.

While volume was relatively light early in the session, the new paper was making large gains on an outright and dollar-neutral basis.

The notes traded as high as 103.25; however, the majority of prints were around 102.5, a source said.

The notes were expanding on a dollar-neutral, or hedged, basis.

GoPro’s stock traded to a low of $6.84 shortly after the opening bell.

However, it pared its losses and was changing hands at $6.92, an increase of 0.072%, shortly before 11 a.m. ET.

FireEye in focus

FireEye’s 0.875% convertible notes due 2024 were in focus on Friday following news Blackstone was investing in the company.

The 0.875% convertible notes popped above par for the first time in several months.

The notes were changing hands at 101.25 early in the session with more than $5 million in reported volume.

The convertibles were previously on a 98-handle.

FireEye’s stock traded up to $14.99, an increase of 5.27%, shortly before 11 a.m. ET.

The notes were posting gains on news that Blackstone’s venture capital firm ClearSky purchased $400 million of par-of-$1,000 convertible preferreds.

The convertible preferreds priced with a coupon of 4.5% and a threshold appreciation premium of 27%, a source said.

In addition to the private placement, FireEye announced that it was acquiring cyber-security firm Respond Software in a cash-and-stock deal valued at $186 million.

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