Tiny producer and distributor of on line and television programming Chicken Soup for the Soul Entertain (NASDAQ:CSSE) has priced a new cumulative preferred stock issue.
The $25 issue will carry a fixed coupon of 9.75% and will pay monthly dividends. The dividends will be cumulative and will be qualified to the extent the company is profitable–otherwise the dividends paid will be a non dividend distribution classified as a return of capital.
The new preferred issue has just begun trading under the ticker of CSSEP and is trading around $24.90.
While we have not done a thorough analysis of CSSE the 9.75% coupon and the $1.50 underwriting discount (about twice the normal discount) given to the underwriters goes a long way toward letting investors know this is a risky, lower quality issue.
We have no interest in purchasing any of this issue.