Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

The Week That Was In Convertibles

|Includes: AMAG, ARRY, AVID, BKD, BMRN, BRS, CLVS, CSOD, CTRP, ENDP, GNC, GOGO, IART, ICON, INVN, IONS, IPX, IRWD, JKS, LGND, LYV, MCHP, NUAN, NVLN, OREX, SPPI, TSN, TTM, TTWO, UPLD, VTG, XXIA, Zillow Group, Inc. (Z)

The Week That Was

August 7 / Kathy Schick

While earnings remain the big news item, we did get one new convertible issue this week. On Tuesday, GNC Holdings (NYSE:GNC) announced an offering of $250 million senior convertible notes due 2020. The deal priced with a 1.5% coupon and an initial conversion premium of 30%. GNC is the leading global specialty retailer of health, wellness, and performance products. The proceeds from the deal will be used to repurchase $100 million of stock with the balance used to repay borrowings under a senior secured term loan facility. The company also announced on Tuesday, it was increasing its share repurchase authorization by $500 million. The convert received an initial HOCS slash line of 56 Overall / 56 Growth / 58 Safety based on the initial deal terms of 1.75% up 32.5%, not a great score for a new deal, but the optics were attractive, the calendar has been light, and the name is well known. The bonds traded up about a point out of the gate and have retreated a bit since, with the stock under mild pressure in a tough market.

Earnings continue to dominate the news. For this week, Array Biopharma (NASDAQ:ARRY) announced results that beat both the EPS and revenue consensus estimates, as did Broadsoft (BSFT), Biomarin Pharmaceuticals (NASDAQ:BMRN), Ctrip. com (NASDAQ:CTRP), Interactive Intelligence (NASDAQ:ININ), and Alon USA Energy (NYSE:ALJ). Tyson Foods (NYSE:TSN) announced results that missed both estimates, as did Brookdale Senior Living(NYSE:BKD) and Microchip Technology (NASDAQ:MCHP).

On Tuesday, ISIS Pharmaceuticals (ISIS), a regular on the HOCS 20, reported results that were in-line with the EPS consensus estimate, but a bit light on revenue. The company ended the quarter with $755 million in cash and expects to end the year with that level. In separate news, the company reported positive Phase 3 results from a study of Kynamro to lower LDL-cholesterol and announced a new collaborative agreement with AstraZeneca. The new agreement builds upon an existing relationship with AstraZeneca and will involve using antisense technology to develop therapies for cardiovascular, metabolic, and renal diseases. The deal will allow ISIS to become involved in diseases of the kidney. The company will receive an upfront payment of $65 million, plus development and regulatory milestones, and tiered double-digit royalties on annual sales.

Also on Tuesday, Alere (NYSE:ALR) reported results that were in-line with the EPS consensus estimate and beat the revenue estimate, as did HomeAway (NASDAQ:AWAY). ANI Pharmaceuticals (NASDAQ:ANIP), Carriage Services (NYSE:CHK), and NRG Yield (NYLD) reported results that missed the EPS and revenue consensus estimates. EPR Properties (NYSE:EPR), Incyte (NASDAQ:INCY), InvenSense (NYSE:INVN), J2 Global (NASDAQ:JCOM), Ligand Pharmaceuticals (NASDAQ:LGND), Allscripts Healthcare Solutions (NASDAQ:MDRX), MGM Resorts (NYSE:MGM), Oclaro (NASDAQ:OCLR), Renewable Energy Group (NASDAQ:REGI), Vantage Drilling Company (NYSEMKT:VTG), and Ixia (NASDAQ:XXIA) all reported results that beat both the EPS and revenue estimates. Sprint (NYSE:S) reported results that beat the EPS estimate, but missed the revenue estimate.

Zillow (NASDAQ:Z) reported results that handily beat the consensus EPS estimate and revenues beat the estimate slightly. The stock was initially up strongly as shorts scurried to cover positions, but once the dust settled the stock had drifted back down to the $74 level. It actually broke below $70 briefly on Thursday before buyers stepped in to support it. Jeff Alton, who wrote about Zillow in this past Monday's Hybrid Vigor, did some investigating and determined that management is faced with the quandary of spending big on advertising for a small incremental increase in revenue or cutting advertising which could result in a revenue shortfall. All the while, general, administrative, and technology spending are growing as Zillow absorbs Trulia. For more complete coverage of Zillow please refer to Jeff's Hybrid Vigor piece from Monday and his Intra-Day Update from Wednesday.

On Wednesday, Ariad Pharmaceuticals (NASDAQ:ARIA), Clean Energy Fuels Corp (NASDAQ:CLNE), Ironwood Pharmaceuticals (NASDAQ:IRWD), Opko Health (NYSEMKT:OPK), Redwood Trust(NYSE:RWT), Sequenom (NASDAQ:SQNM), and Xenoport (NASDAQ:XNPT) announced results that missed both the EPS and revenue estimates. Chesapeake Energy and Echo Global Logistics (NASDAQ:ECHO) reported results that beat the EPS estimate, but missed on revenues. LGI Homes (NASDAQ:LGIH), Priceline Group (PCLN), Aegerion Pharmaceuticals (AEGR), CSG Systems (NASDAQ:CSGS), Performant Financial Corp(NASDAQ:PFMT), Tesla Motors (TSLA, a HOCS 20 regular) and TTM Technologies (NYSE:TTM) reported results that beat both the EPS and revenue consensus estimates. Despite the beat, Tesla came up short on vehicle-delivery metrics. While bulls continue to argue Tesla has no problems with demand, bears are not convinced the company can manage its production challenges despite its assurances to the contrary. Jazz Pharmaceuticals (NASDAQ:JAZZ) reported results that were in-line with the EPS consensus estimate, but missed the revenue estimate. Stone Energy (SGY) results missed the EPS estimate, but beat the revenue estimate.

On Thursday, Orexigen Therapeutics (NASDAQ:OREX) reported results that missed the EPS consensus estimate but beat on revenue, but more importantly the company announced it had resolved its dispute with Takeda Pharmaceuticals, its US marketing partner. Emergent BioSolutions (NYSE:EBS) Vereit (NYSE:VER), Anacor Pharmaceuticals (NASDAQ:ANAC), Clovis Oncology (NASDAQ:CLVS), PROS Holdings (NYSE:PRO), Nuance Communications (NASDAQ:NUAN), Nvidia (NASDAQ:NVDA) and Spectrum Pharmaceuticals (NASDAQ:SPPI) announced results that beat the EPS and revenue consensus estimates. Pernix Therapeutics (NYSEMKT:PTX), Fluidigm (NASDAQ:FLDM) and Royal Gold (NASDAQ:RGLD) announced results that missed both the EPS and revenue estimates. (Fluidigm's stock is down nearly 40% following its miss, with the convertibles trying to find an appropriate level.) Air Lease (NYSE:AL) reported in-line EPS results and beat on revenues. Cornerstone OnDemand (NASDAQ:CSOD), Incontact (NASDAQ:SAAS), and Tesaro(NASDAQ:TSRO) missed the EPS estimate, but beat on revenues. Gogo (NASDAQ:GOGO) and Bristow Group (NYSE:BRS) missed the EPS consensus estimate while revenues were in-line.

And finally, on Friday, Horizon Pharmaceuticals (NASDAQ:HZNP) and Horsehead Holding(ZINC) reported results that beat both the EPS and revenue estimates. SouFun(NYSE:SFUN) results were in-line with the EPS estimate but missed the revenue estimate. Lexicon Pharmaceuticals (NASDAQ:LXRX) announced results that beat the EPS estimate.

In other news this week, JinkoSolar (NYSE:JKS) signed a $62 million plus RMB 50 million loan agreement with the Export-Import Bank of China. The US$ loan will be used to support long-term fixed assets and mid-term working capital for Jinko's production facility in Malaysia. The RMB loan will be used for near-term working capital for the facility......... Integra Lifesciences (NASDAQ:IART) announced plans to offer $200 million of common stock with proceeds to be used to pay down the senior credit facility......... AMAG Pharmaceuticals (NASDAQ:AMAG) announced it was offering $450 million of senior notes due 2023. The proceeds will be used to finance the acquisition of Cord Blood Registry, to refinance certain debt, and for general corporate purposes......... Ironwood entered an agreement with Allergan for the US co-promotion of Viberzi, Allergan's new treatment for irritable bowel syndrome with diarrhea. The co-promotion will begin once Verbizi is commercially available.

Companies announcing earnings for the upcoming week include: Endo International, Envestnet, Take-Two Interactive Software, Alaska Communications Systems, Ascent Capital Group, Avid Technology, CenterPoint Energy, Iconix Brand Group, Impax Laboratories, 51job, Live Nation Entertainment, Walter Investment Management, PDC Energy, Pattern Energy Group, and MannKind for Monday; JDS Uniphase and Viavi Solutions for Tuesday; and Upland Software for Wednesday.