Morning Commentary: Uber convertible notes jump in early trading on share buyback

By Abigail W. Adams

Portland, Me., Feb. 14 – While the convertibles primary market remained dormant early Wednesday, the secondary space was active as equity indexes rebounded after the heavy selling of the previous session.

The Dow Jones industrial average was up 78 points, or 0.21%, the S&P 500 index was up 0.59%, the Nasdaq Composite index was up 0.75% and the Russell 2000 index was up 1.55% shortly before 11 a.m. ET.

There was $126 million in reported convertibles trading volume about one hour into the session with investment-grade issues again active.

However, topical news was also a driver of trading activity with Uber Technologies Inc.’s convertible notes jumping outright as stock soared following news of a stock buyback.

Uber’s 0.875% convertible notes due 2028 added 8 points outright with stock up more than 11% early in the session.

The notes were trading just shy of 123 versus a stock price of $76.49 early in the session, according to a market source.

There was $12 million in reported volume.

Uber’s 0% convertible notes due 2025 were also up 8 points outright.

They were trading at 111 versus a stock price of $76.49.

There was $7 million in reported volume.

Uber’s stock was trading at $77.69, an increase of 12.61%, shortly before 11 a.m. ET.

Uber’s stock and the convertible notes soared after the company announced its board had authorized a share buyback program of up to $7 billion.

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