Shift4 Payments sinks on short-seller report; Enovix comes in; Rivian, Ford weaker

By Abigail W. Adams

Portland, Me., April 19 – It was another quiet session in the convertibles secondary space on Wednesday as markets struggled to find direction with the latest batch of earnings doing little to move the needle.

Equity indexes opened the day in the red but fought off losses to close the day largely flat with the Dow Jones industrial average down 80 points, or 0.23%, the S&P 500 index down 0.01%, the Nasdaq Composite index up 0.03% and the Russell 2000 index up 0.11%.

There was $67 million in reported convertibles trading volume about one hour into the session and $425 million on the tape about one hour before the market close.

Investment-grade issues continued to dominate with Duke Energy Corp.’s 4.125% convertible notes due 2026 (Baa2/BBB) and Southern Co.’s 3.875% convertible notes due 2025 (Baa2/BBB) accounting for about one-quarter of the total trading activity although with little movement in price.

Recent issues remained active with Mirum Pharmaceuticals Inc.’s 4% convertible notes due 2029 continuing to add while Enovix Corp.’s 3% convertible notes due 2028 came in alongside stock.

Topical news pushed Shift4 Payments Inc.’s 0% convertible notes due 2025 into the spotlight with the notes falling outright as stock took a hit following a short-seller report.

Ford Motor Co.’s 0% convertible notes due 2026 (Ba2/BB+) and Rivian Automotive Inc.’s 4.625% convertible notes due 2029 were also weaker on Wednesday with automakers under pressure ahead of Tesla Inc.’s earnings.

Investment-grade trades

Investment-grade issues continued to dominate the tape on Wednesday with Duke Energy’s 4.125% convertible notes due 2026 and Southern Co.’s 3.875% convertible notes due 2025 accounting for about one-quarter of the total volume in the space.

While the notes remained active, there was little movement in price.

Duke’s 4.125% notes remained wrapped around 101.5.

There was $67 million in reported volume.

Duke Energy’s stock traded to a low of $97.53 and a high of $98.55 before closing at $98.40, an increase of 1.02%.

Southern Co.’s 3.875% convertible notes due 2025 were changing hands at 102.75 versus a stock price of $72.67 in the late afternoon.

There was $35 million in reported volume.

Southern Co.’s stock traded to a low of $72.60 and a high of $73.24 before closing at $72.81, up 0.32%.

Recent issues

Recent issues remained active in the secondary space with Enovix’s 3% convertible notes due 2028 coming in alongside stock while Mirum Pharmaceuticals’ 4% convertible notes due 2029 continued to hit new heights.

Enovix’s 3% notes fell 1.5 points outright with stock off more than 3%.

They were trading at 102.5 versus a stock price of $12.96 in the late afternoon, according to a market source.

There was $6 million in reported volume.

Enovix’s stock traded to a low of $12.33 and a high of $13.46 before closing at $12.59, a decrease of 5.41%.

The notes skyrocketed on their aftermarket debut on Tuesday with the notes trading as high as 107 and expanding about 4.5 points dollar-neutral before coming in at the close.

Mirum Pharmaceuticals’ 4% convertible notes due 2029 continued to add to the strong gains made since pricing at par the previous week.

The 4% notes added 1 point outright with stock up about 1.5%.

The notes were changing hands at 112.5 versus a stock price of $16.25 in the late afternoon.

There was $8 million in reported volume.

Mirum’s stock traded to a low of $25.24 and a high of $26.36 before closing at $26.02, an increase of 0.68%.

Shift4 takes a hit

Shift4’s 0% convertible notes due 2025 were pushed into the spotlight on Wednesday after short-seller Blue Orca took aim at the company.

The 0% notes fell 6.5 points outright with stock off more than 9%.

The notes were changing hands at 104 versus a stock price of $61.41 in the late afternoon, a source said.

There was $17 million in reported volume.

Shift4’s stock traded to a low of $57.88 and a high of $67.99 before closing at $62.59, a decrease of 8.69%.

Stock sank after short-seller Blue Orca took aim at the digital payment processor, alleging that the company engaged in questionable accounting maneuvers to keep stock afloat in 2022.

Auto pressure

Rivian’s 4.625% convertible notes due 2029 and Ford Motor’s 0% convertible notes due 2026 (Ba2/BB+) were weaker on Wednesday with automakers under pressure ahead of Tesla Inc.’s earnings.

Rivian’s 4.625% convertible notes due 2029 sank 3 points outright with stock off more than 4.5%.

The notes were changing hands at 93.75 versus a stock price of $12.82 in the late afternoon.

There was $5 million in reported volume.

Rivian’s stock traded to a low of $12.66 and a high of $13.08 before closing at $12.82, a decrease of 4.54%.

In addition to a heavy day for automakers, an RBC analyst recently downgraded Rivian’s stock to hold from buy and cut the price target to $14 from $28.

Ford’s 0% convertible notes due 2026 fell 2 points outright to once again trade below par.

The 0% notes were changing hands at 98.5 early in the session and 98.625 versus a stock price of $12.28 in the late afternoon.

There was $11 million in reported volume.

Ford’s stock traded to a low of $12.17 and a high of $12.60 before closing at $12.22, a decrease of 4.01%.

Mentioned in this article:

Duke Energy Corp. NYSE: DUK

Enovix Corp. Nasdaq: ENVX

Ford Motor Co. NYSE: F

Mirum Pharmaceuticals Inc. Nasdaq: MIRM

Rivian Automotive Inc. Nasdaq: RIVN

Shift4 Payments Inc. NYSE: FOUR

Southern Co. NYSE: SO

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