Morning Commentary: Atlassian convertibles eyed post-earnings; Elanco gains continue

By Abigail W. Adams

Portland, Me., Jan. 24 – The convertible secondary space remained active early Friday with new paper and earnings-related news driving trading activity.

Atlassian Inc.’s 0.625% convertible notes due 2023 surged alongside stock after the enterprise software company reported second-quarter earnings.

The 0.625% notes jumped 15 points outright with stock up more than 10%, sources said.

The notes traded up to 185 early in the session with more than $11 million in estimated volume, a market source said.

Atlassian stock was $146.79, an increase of 10.09%, shortly before 11 a.m. ET.

Stock surged following a top and bottom line earnings beat.

Atlassian reported second-quarter earnings per share of 49 cents versus analyst expectations of earnings per share of 27 cents.

Revenue was $408.7 million versus analyst expectations for revenue of $389 million.

Meanwhile, Elanco Animal Health Inc.’s 5% tangible equity units remained active with the units continuing to gain on a dollar-neutral basis.

Following a 5.5 point expansion on Thursday, the units were changing hands at $55.50 shortly before 11 a.m.ET on Friday with stock down.

Elanco stock was $31.53, a decrease of 2.23%, shortly before 11 a.m. ET on Friday.

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