Morning Commentary: MongoDB convertible notes in focus early on earnings beat

By Abigail W. Adams

Portland, Me., June 2 – While the convertibles secondary space stood poised to close a quiet week quietly, the market tone was dramatically improved with risk of government default in the rear-view, the Fed signaling a pause in rate hikes and the non-farm payrolls report signaling a resilient economy.

Equity indexes were off to the races with the Dow Jones industrial average up 542 points, or 1.62%, the S&P 500 index up 1.35%, the Nasdaq Composite index up 1.05% and the Russell 2000 index up 2.18% shortly before 11 a.m. ET.

There was $113 million on the tape about one hour into the session although one name accounted for nearly one-half of the total activity in the space.

MongoDB Inc.’s deep-in-the-money 0.25% convertible notes due 2026 dominated activity in the secondary space as stock skyrocketed more than 30% after a large earnings beat.

The convertible notes added 12 points outright.

They were changing hands at 188.375 early in the session.

There was $47 million in reported volume.

MongoDB’s stock was seen at $378.02, an increase of 28.44%, shortly before 11 a.m. ET.

Stock skyrocketed after the software company became the latest from the tech sector to trounce earnings expectations.

MongoDB reported earnings per share of 56 cents versus the 19 cents expected on revenue of $368.28 million versus the $347.04 million expected.

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