Secondary quiet amid equity volatility; Insulet, Cryoport convertibles in focus post-earnings

By Abigail W. Adams

Portland, Me., Nov. 4 – The convertible bond secondary space was quiet on Friday with equity markets volatile following the latest non-farm payrolls report.

The report joined the chorus of data painting a mixed picture of the economy with job growth stronger than anticipated, and the unemployment rate higher than expected.

Equity indexes started strong following the report but lost their gains and entered into negative territory midsession only to be pushed back to the highs of the day in late trading.

The Dow Jones industrial average closed up 402 points or 1.26%, the S&P 500 index closed up 1.36%, the Nasdaq Composite index closed up 1.28% and the Russell 2000 index closed up 1.13%.

There was $380 million in reported volume shortly before the market close with earnings-related volatility the main driver of activity in the convertible bond space.

Insulet Corp.’s 0.375% convertible notes due 2026 were traded in heavy volume with the notes jumping outright and added dollar-neutral as stock surged following a large earnings beat.

Cryoport Inc.’s 0.75% convertible notes due 2026 were weaker outright as stock collapsed after a large earnings miss.

Insulet jumps

Insulet’s 0.375% convertible notes due 2026 surged outright and improved dollar-neutral as stock catapulted higher following a large earnings beat.

The 0.375% notes jumped 20 points outright with stock up more than 22%.

They were changing hands at 141.625 early in the session and continued to rise as the session progressed.

The notes were trading at 147.25 versus a stock price of $310.68 heading into the market close, a source said.

The notes gained dollar-neutral on the move up.

There was $10.5 million in reported volume.

Insulet stock traded to a low of $288.82 and a high of $320 before closing the day at $313, an increase of 22.58%

Stock surged after the medical device company crushed analyst expectations with earnings per share of 41 cents versus analyst expectations for earnings of 14 cents.

Revenue was $340.8 million versus analyst expectations for revenue of $311.22 million.

Insulet’s convertible notes were attracting buyers on Thursday heading into the earnings report, a source said.

Cryoport’s earnings

Cryoport’s 0.75% convertible notes due 2026 were weaker outright but holding their bond floor as stock collapsed post-earnings.

The long-busted 0.75% notes fell about 2 points outright as stock plummeted more than 30%.

They were changing hands at 71.75 with a yield of 9.25% heading into the market close.

There was $15 million in reported volume.

The cryogenic logistics solutions company’s stock traded to a high of $21.34 and a low of $17.99 before closing the day at $18, a decrease of 32.05%.

Stock plummeted after the company reported a surprise loss of 15 cents a share versus the earnings per share of 1 cent expected.

Revenue was $60.5 million versus the $65.11 million expected.

Mentioned in this article:

Insulet Corp. Nasdaq: PODD

Cryoport Inc. Nasdaq: CYRX

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