CEF Gabelli Dividend and Income Calls Preferred for Redemption

Now just how soundly do you have to be napping to be caught holding the Gabelli Dividend and Income 5.875% (GDV-A) cumulative preferred stock when it is trading at $26.35 and has been optionally redeemable since 2009?

Those holders got a 4% lesson yesterday–as a call was announced and the ‘dump’ was swift–tumbling 97 cents.

The redemption will occur on 9/25/2020.

The company had previously called 1.542 million shares on 5/6/2020 so that should have alerted folks shares were in the company sights for a full redemption–but memories are short nowadays and after a fall after this earlier call folks drove the price right back up.

On the other hand holders have garnered a great, safe dividend for many years by holding shares so I guess holders turned out ok–unless you bought last week.

The press release on the redemption can be found here.

mcg was on this at 2:23 pm as was Ptrader 3 minutes later noting a volume spike. I was reviewing the preferred share loss page at the same time and noted the large drop in the issue–I instantly knew a call was at hand–it had traded 25 times normal volume. Posting was on the Reader Initiated Alert page.

10 thoughts on “CEF Gabelli Dividend and Income Calls Preferred for Redemption”

  1. GGT-E is dropping in sympathy; closed yesterday @27 and is trading now at 26.08 (3.4% down).

    1. MFZ, it appears that GGT-E’s share price receded from spike caused by purchase of 3060 shares yesterday (Aug 24) at 10:04 AM, likely by an institution/fund.

  2. Tim………… Ty…. for your steady help through Pandemic.. took all my preferred stock,..brought them, below $25… 95% up above and GDV.

  3. Just a good reminder for all investors to look at the call date on all of their securities. At least for me, I’ll continue to hold a security that is callable if the price is $25.50 or lower – just in case the issue is never called. However, in a low interest rate environment like we have now, many of these companies would be outright foolish if they did not refinance some of their debt now.

    UMH Properties is going to call their 8% preferred soon and replaced it with a credit facility that has a fixed rate of 2.62% for 10 years. While the company had to incur debt to pay off the preferred, this will be a great savings for them over the years.

  4. Jeez, I’m new at this but I wouldn’t pay $26 for anything that’s been partially called just a few months ago. Especially in an environment where any company with a good credit rating can initiate a new issue at well below 5.875% to cover the cost of a call if necessary.

    1. @bob – you sure you are referring to the A-series preferred – it has not traded above $25.40 today. The G- and H-series have.

        1. bob–not the first time that has happened–we all have bought or sold the wrong issue at some point in time.

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