Capped call AYX and others

Many companies raise capital with Debt that has convertibility to equity. You pay a lower rate with the convertible feature. AYX is buying out convertible debt 2023 and replacing it with new issues with new longer terms 2025 and 2026 and higher conversion prices. They are raising about 700mm so about 8% of recent EV the close date is Aug 12. There are numerous hedging strategies going on by all the parties involved both new and unwinding of old hedges. Think of it as our own little “triple witching” but maybe going on for a week- a few days on either side of the transactions.

Several companies I follow are doing this and the volatility impacts others in the same sector, when investors don’t have any idea why the volatility is happening. Not everyone is playing the same game in the market at the same time, your long-term holdings will be affected by short term dislocations that mean nothing for equity holders with different time horizons. A big iceberg calved off making waves but the ocean with settle down after the transactions have been done……

Long AYX
And other stocks with complex financial transactions



Are you suggesting that today’s AYX drop may have been somewhat caused by transactions relating to the convertible bond issuance from early August?

Was there some aspect of ~30 days later that would have been occurring today?

I noted up through last week that Alteryx had held up very firmly compared to many other high-flying high-P/S multiple companies followed closely here. It even set new all-time highs last Wednesday, Thursday, and even early in the day on Friday.

long AYX as firmly a top-4 position


Color me embarrassed, I am living in the wrong month, it has been a busy time is my only excuse.

But I am finding these transactions across my interest list. It is introducing volatility as thes transactions get hedged out.

Sorry for wasting your time.