Morning Commentary: Coinbase, MicroStrategy convertible notes rise as crypto rallies

By Abigail W. Adams

Portland, Me., March 21 – While the convertibles primary market stood poised for a paperless week, the secondary space was active as markets continued to gain on the heels of the Fed announcement.

Equity indexes surged higher with Treasuries largely unchanged early Thursday as markets celebrated a dovish Fed that reaffirmed rate cuts were coming.

The Dow Jones industrial average was up 331 points, or 0.84%, the S&P 500 index was up 0.64%, the Nasdaq Composite index was up 0.62% and the Russell 2000 index was up 1.36% shortly before 11 a.m. ET.

There was $114 million in reported volume about one hour into the session with crypto back in focus as Bitcoin rebounded from its recent pullback.

Coinbase Global Inc.’s recently priced 0.25% convertible notes due 2030 shot to new outright heights after only recently setting a new outright low in active trade.

MicroStrategy Inc.’s convertible notes were also riding the crypto wave with the most recently priced 0.875% convertible notes due 2031 returning to par.

Bitcoin was once again on an upswing and trading at $66,930, an increase of 4.25%, shortly before 11 a.m. ET.

Coinbase’s new heights

Coinbase’s recently priced 0.25% convertible notes due 2030 hit a new outright high in early trade.

The 0.25% convertible notes jumped 5 points outright with stock up almost 6% in early trade.

The notes were trading at 106 versus a stock price of $268 early in the session, according to a market source.

There was $11 million in reported volume.

Coinbase’s stock was trading at $273.80, an increase of 6.68%, shortly before 11 a.m. ET.

The 0.25% convertible notes traded down to a 94-handle on Tuesday with crypto names under pressure amid the pullback in Bitcoin.

However, they rebounded to pop above par on Wednesday.

While volatile outright, the notes were largely moving in line with stock.

MicroStrategy gains

MicroStrategy’s convertible notes were on the rise alongside stock with the most recently priced 0.875% convertible notes due 2031 returning to par.

The 0.875% notes were up 3 points outright as stock rose more than 9%.

They were trading at par versus a stock price of $1,614 early in the session, according to a market source.

The 0.625% convertible notes due 2030 were up 6 points outright to trade at 130.25.

The 0% convertible notes due 2027 jumped 10 points outright to 136.875.

MicroStrategy’s stock was trading at $1,681, an increase of 8.74%, shortly before 11 a.m. ET.

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