Wayfair convertible notes hit new heights; Confluent active; Coinbase lower outright

By Abigail W. Adams

Portland, Me., June 5 – It was a quiet start to the week for the convertibles primary and secondary markets with no new deals announced and trading volume light as equities gave back some gains from Friday’s rally.

Few were making moves in the secondary space with market players eyeing the calendar and awaiting new paper to put money to work.

While equity indexes were mixed for most of the session, they were dragged into the red by Monday’s close, giving back some of the strong gains made following the passage of a debt-limit deal that enabled the U.S. government to narrowly avoid defaulting on its debt.

The Dow Jones industrial average closed Monday down 200 points, or 0.59%, the S&P 500 index closed down 0.20%, the Nasdaq Composite index closed down 0.09% and the Russell 2000 index closed down 1.32%.

There was $55 million in reported convertibles trading volume about one hour into the session and $393 million on the tape one hour before the market close with few names seeing concentrated trading activity.

Wayfair Inc.’s 3.5% convertible notes due 2028 shot up to a new outright high on a strong day for stock.

Confluent Inc.’s 0% convertible notes due 2027 were among the most actively traded issue in the space with the notes holding onto the gains made as stock ran upward 20% the previous week.

Coinbase Global, Inc.’s 0.5% convertible notes due 2026 were lower alongside stock with crypto-exchanges under pressure following news the Securities and Exchange Commission filed suit against Binance.

Wayfair’s new high

Wayfair’s 3.5% convertible notes due 2028 hit new outright heights on Monday on a strong day for the company’s stock.

The 3.5% notes gained 5 points outright with stock up more than 6%.

They were changing hands at 118 in the late afternoon, according to a market source.

There was $12 million in reported volume.

Wayfair’s stock traded to a low of $41.92 and a high of $46.45 before closing at $46.25, an increase of 7.04%.

Monday’s level marks the highest for the notes since the $690 million issue priced at par in early May.

The notes were volatile their initial days in the market and traded on either side of par before stock caught a bid the previous week.

Stock has gained more than 20% over the past week after JPMorgan added the home decor e-commerce company to its Analyst Focus List with an overweight rating.

Confluent active

Confluent’s 0% convertible notes due 2027 were among the most actively traded issues in the secondary space with the notes holding onto the strong gains made the previous week.

The high-premium 0% convertible notes were up another 0.25 point outright with stock up another 2%.

They were changing hands at 82.5 in the late afternoon, according to a market source.

The yield was about 5.375%.

There was $14 million in reported volume.

Confluent’s stock traded to a low of $33.45 and a high of $35.48 before closing at $35.44, an increase of 2.55%.

The notes gained about 3 points outright the previous week with stock jumping 20% after a Needham analyst initiated coverage with a buy rating and price target of $35 on the stock.

Coinbase lower

Coinbase’s 0.5% convertible notes due 2026 were lower in active trade as the SEC took action against crypto-exchange behemoth Binance.

The 0.5% notes fell almost 2 points outright with stock off 9%.

The notes were trading at 68.875 in the late afternoon.

While lower outright, they were moving in line dollar-neutral on a light hedge, a source said.

Coinbase’s stock traded to a high of $64.44 and a low of $55.81 before closing at $58.70, down 9.05%.

The crypto-exchange was dragged lower alongside the broader crypto space as the SEC took action against Binance.

In a lawsuit filed against Binance on Monday, the SEC alleged the crypto-exchange, which was founded in Shanghai but does not have a physical headquarters, had illegally operated a trading platform in the United States and misused customer funds.

Coinbase is also in the crosshairs of the SEC with the SEC issuing the crypto-exchange a Wells notice in late March informing of its intention to take enforcement action.

The SEC and Coinbase have long been at odds over the tokens and products offered by Coinbase, which the SEC claims are securities that need to be registered.

Mentioned in this article:

Coinbase Global, Inc. Nasdaq: COIN

Confluent Inc. Nasdaq: CFLT

Wayfair Inc. NYSE: W

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