Purchased New Gladstone Investment Term Preferred

We have just purchased 500 shares of the new Gladstone Investment term preferred at $24.70–thanks to reader SPM we found out the issue is trading OTC Grey market already under ticker GLDZP.

Even though the coupon is meager at 6.375% this issue should trade up to the $25.25-$25.50 area in the month ahead based on the GAINM 6.25% issue which is trading around $25.20 right now.

We purchased through Fidelity–it was not posted yet on eTrade.

32 thoughts on “Purchased New Gladstone Investment Term Preferred”

  1. I think the (hopefully temporary) mispricing of GLDZP provides some opportunities. Yesterday, I went into my wife’s IRA, sold off her GAINM and replaced it with GLDZP at a lower price. How often do you get a chance to sell the weak sister and replace it with a better version at a lower price?

  2. GAINM in my opinion should trade within 1 divy payment and hover near $25. I would think in the next 6 months this guy is gone. I thought i read somewhere in their strategy that by Spring of next year, they want to have asset coverage reduced to 150%. That means that GAINM would have to be called, or something has to be amended for this one to stick around.

    1. GAINO & GAINN have been called, so it might take some months for them to accumulate the cash to call GAINM.

      If GAINM trades below a 30-day accumulated dividend, might be good to try and scalp a few pennies during that time. I agree that they have to call GAINM fairly soon due to the 200% coverage requirement.

  3. I see GLDZP fluctuating between $25 and $25.11. Was not able to react the past couple days as I was consumed helping a friend in palliative care.

    Is it worth it to grab some even at this price?

    1. I think so. GAINM could be called next month and that has a lower coupon, and it is trading at $25.23, so i believe that makes sense. At some point in time, GAINM will go. Why? because it says they need to have asset coverage at 200%. That would leave this new guy as the reigning champ. My gut says this guy will probably go to $25.20-$25.30 in the short term.

  4. FWIW . I was able to buy CBKLP thru Fidelity with no problem and got filled below the ask price on 2 separate lots ..

  5. These brokerages are getting ridiculous.. they want your biz, advertise ad nauseum but unless it is a vanilla trade, forget it.. as a US citizen, I run into the same thing w non DTC participating Canadian firms on Fido.. you have to pay an extra $50 to get in or out of them.. where do you go??

    Vanguard? looks like the others are just as bad,, IB.. i’ll be darned if I am going there, would rather just pass.. been w Fido since I started investing, frustrating..I don’t trade much but when I pull the trigger or sell I’d like to be able to do it quickly, easily and cheaply online..

    “we love traders, come to us”.. well folks just don’t trade Tesla and FB! as is evidenced by the visitors here on Tim’s site

    reminds me of the push yrs ago to ATMs to “save money” for the banks.. now even that includes hoops and fees.. oh well.. Bea

    1. Hi Bea—I sense a little frustration and can relate–seems we all have the same types of issues. I will say it has been a while since I have messed around with any that have the $50 fee. On the other hand I remember calling the broker and then waiting for results and then having to check the wall street journal each morning for prices–I can’t even imagine those days now.

    2. Bea, yes its incredible. Between my 3 usually one will trade what I need. But some do not. Heck one time I had CBKLP ordered at ask price. I see the bid and ask as the same and it wont pair off. So I call and they then explain they cant trade that security for me. Well then block it. Dont let it go out into the market and act like it can be bought…Amazing.

    1. Hi Keith—yes unfortunately each firm is different. eTrade was my preferred account for this–but it wasn’t up yet so had to do Fidelity were it was up. I see it trading at 24.75 right now and likely it will be there – or close to that tomorrow morning.

      1. I snooze…I lose! Vascillated to even get in and right when I decided to hit the button at 25.75 it jumped on me. So I went the penny pinching root and put 15k in timeout. Bought GAINO at 25.10 and hope to snag two 14 cent divis before redemption. Maybe something I like will be cheaper in a month. I can always hope anyways.

        1. Hi Grid–you are so right–snoozing and losing.

          On the GAINO I think you will only receive the 1 dividend as the call date is 8/31.

          1. Ya, Tim…I blew it….Always read propspectus. This is an odd duck that doesnt need to give 30 day notice… Looks like $19 profit for holding 17 days…My girlfriend is not going to be pleased with the saturday night dinner she will get from the proceeds of this trade!

      2. I purchased 300 at 24.65 but later thought I should have made that 400 shares so I’ve got another order for 100 in at 24.70. Maybe I’ll get lucky. Also, decided to get back into an issue that I sold out of back in June. CBKLP. It ain’t sexy but pay’s a little over 6% and it’s investment grade and very steady. As a retired person, what else can you ask for ? The Gladstone’s have to be balanced with some steady eddie’s.

        1. I will tell you what I can ask for…..Retired…..A freaking brokerage account that would allow be to buy CBKLP, CBKPP, and or AGRIP. I am blocked online and called 2 of them and they said no can do. Its amazing the quirks from brokerage to brokerage on what they will allow to trade….One time last year I was allowed to buy and preferred, but they blocked me from selling it online. Figure that one out, lol.

          1. I swear I have been blocked by Fido in the past which is why there is always too much cash there–but they took the GLDZP order instantly–and better yet executed it.

          2. Sounds familiar. Tim is smart to have more than one brokerage to work with. Fidelity gives me all kinds of trouble with F to F issues unless I buy before they migrate to the main exchanges. Also, can’t buy BB with a three letter symbol…but CBKLP is not a problem. I have no idea how they come up with what’s available and what’s not except that I noted in attempting a trade on CBKPP and AGRIP, SEC rule 144A is the sited reason for not allowing an online trade.

        2. I have made good money on CBKLP and still hold some now. Also the floating rate version CKNQP (IIRC) which I got at a much lower price than it now trades at. CBKLP is currently callable though so be careful of your entry price.

          On a different note. Merrill Edge will no longer let you hold structured notes in the your Edge account so I have 8 issues over four accounts I have to find a home for. One is a trust, and three are retirement accounts. Any suggestions? They told me the account would be liquidated if I don’t sell or move them out, even though I just moved them in a few years back when I dropped my Merrill Lynch adviser and started managing my own accounts. He is the one who purchased these and I was just letting them sit to maturity. I like Edge because I get free trades, they have a good site, and they are always early with allowing trades of new issues like the Gladstone we are discussing. But they can be a pain in the ass in other ways, such as limiting which sorts of option trades you can make.

          Anyway, anyone else trade the structured products or know where a good place might be to park some of these things? I am really not happy about having to set up a bunch of new accounts, but I think Merrill is trying to force people back into using their advisers.

          My apologies to Tim if I have strayed off the topic he would like to keep to on his site. Not really sure what the rules are, but this place seems like home.

          1. Scott is your reference to “structured products” as in old Smith Barney investments such as KTBA? Or are you referring to more opaque type of structured product?

          2. True statement on the CBKLP being callable but they didn’t call on it’s callable date of 7/01/18 so I think it’s safe for at least the next dividend on 10/01 of a little over $1.53/share. If my thought on the next dividend is true, then there is no premium in the current price.

          3. Hey Grid,

            Merrill let me trade the CBKLP stuff no problem, which is one reason I am loathe to move everything out. It is good to have multiple accounts to trade with since they are all so idiosyncratic.

            I am not familiar with the KTBA but here is a link to an example what I am talking about https://www.sec.gov/Archives/edgar/data/886982/000114036118033614/form424b2.htm

            These are called everything under the sun; market linked investments, structured notes or structured products etc… Some are FDIC insured and called CD’s, but they all give a return based on an index or stock without owning the reference issue. The credit rating is basically that of the issuer except for the FDIC stuff.

          4. Scott, sorry I was afraid you were referencing thise type of products. I dont have any insight there. I have bought tradeable “structured products” that were a registered name used to sell issues such as KTBA and KTH that basically hold bonds in trust to back up underlying tradeable security.

        3. Yes, Retired, they were 144a securities and I am not a qualified investor. But like you said CBKLP confounded me as it was not listed as such. I was shut out from it also.

    2. I called Schwab this morning and rattled their cage. I was able to buy some at 24.85 this morning. I wanted it at 24.75 but, unlike Grid, I decided to splurge and ‘pay up.’

      1. Hi Amy – that is why I paid 24.70 in the early am—I had to leave the office and didn’t want to miss out–so I was a nickel above where it was trading–it was worth an extra $25

        1. I can’t seem to locate the annual dividend per share amount in the prospectus unless I’m looking at the wrong one. anyone?

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