Morning Commentary: Freshpet convertible notes soar on quiet morning

By Abigail W. Adams

Portland, Me., Nov. 6 – The convertible secondary space was quiet early Monday as equity markets leveled off after the phenomenal post-Fed rally of the previous week.

Equity indexes were mixed early in the session with the small cap index that surged the previous session the laggard.

The Dow Jones industrial average was up 25 points, or 0.06%, the S&P 500 index was up 0.14%, the Nasdaq Composite index was up 0.31% and the Russell 2000 index was down 1% shortly before 11 a.m. ET.

There was $66 million in reported volume about one hour into the session with few names seeing concentrated trading activity.

While trading activity was light, earnings-related activity continued to spark large price movements in the space.

Freshpet Inc.’s 3% convertible notes due 2028 soared outright alongside stock after a large earnings beat.

The 3% convertible notes jumped 13 points with stock up 18%.

The notes were changing hands at 121 versus a stock price of $71 early in the session, according to a market source.

There was $3 million in reported volume.

Freshpet’s stock was trading at $68.47, an increase of 17.55%, shortly before 11 a.m. ET.

Stock soared after a large earnings beat with the pet food company reporting losses per share of 2 cents versus analyst expectations for losses per share of 16 cents.

Revenue was $200 million versus analyst expectations for revenue of $194 million.

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