California water resource company Cadiz Inc. (CDZI) is selling 2 million shares of a new cumulative preferred.
Shares will trade tomorrow on the OTC grey market market under ticker CDZAV–the issue has not yet priced.
Caution that the company has little revenue and plenty of debt–I would expect this to price in the double digits. Make sure you read and understand company information prior to purchase of this security.
The preliminary prospectus is here.
Priced 8.75%, book it Danno. 50 million and the greenshoe.
https://www.sec.gov/Archives/edgar/data/0000727273/000121390021034918/ea143526-fwp_cadizinc.htm
I dont like fake electrical utilities, so I suspect I wont like fake water utilities.
I own enough crap already.
I guess I can draw a line here- no thanks.
It wouldn’t surprise me if their water plan was to suck the last drop of underground water in that area ( do they have proven reserves?) and sell to L.A.
They boast underground storage capacity! Ha- store water, with L.A. sucking states dry?
Californians are fleeing in record droves- selling-out to buy homes sight unseen and overbidding on top of it. Maybe that will help save some water demand there.
I noticed they are impounding cash from proceeds to guarantee divi monies for a period of time. That certainly means shaky finances.
Yep, I think Ontrak has that provision as well.
Not to be a broken record but like I said a couple of days ago, look back at the last 15 or 20 new issues. You will feel like you are standing in the middle of a Junk Yard Dogs Junk Yard.
Yes Chuck P–I always give a really quick check of the income statement and balance sheet before posting–this one ‘takes the cake’ for the worst one–although maybe I just have no ‘vision to the future’. Think I pass–or maybe run from it.
Bad, bad Leroy Brown. Baddest man in the whole damn town. Badder than ol’ King Kong. Meaner than a junk yard dog … but not as mean as some of these.
Chuck P, no personal opinion on these issues, just posting because I like being reminded of the song.
CDZI if you need to diversify into… political influence based returns… they should be a fine choice.
https://www.hvst.com/posts/dirty-water-w57TVrZ2
Thanks for the facts, tho it’s as much opinion as fact. Politics and lawsuits are two wildcards that can turn investing into gambling. I still might buy the IPO to trade because that’s part of my game. And to learn by observing.
Typically limited to a few sectors of the market. When a type of business that doesn’t normally offer preferreds shows up I’m cautious. Doesn’t mean it’s bad just means a lot of homework required if you’re interested.
I like the sector of water utilities because it is necessary, scarce and probably the last thing you are not going to pay but some of these new companies issuing preferreds are pretty scary.
I had the last two water utility preferreds (not counting MSEXP) CTWSP and CTWSO. Bought a huge slug at 15 (par $20) and a year or two later they were redeemed in a buyout at $21. I would love to own quality water ute preferreds again.
Grid–I owned a number of water utility common shares maybe a decade ago and they performed fabulously—the key here in your statement is ‘quality’ water utes.
Tim, I have always wanted to own some common water shares. They were always too high and I waited for a drop. And guess what they are even higher now, ha.
CDZI may be a target of Reddit investors with the high short interest + I like water stocks.
If it melts up for the following reasons, will be a nice cushion for the preferred.
Am I the only one who feels like suddenly issuing preferreds is the flavor du jour like SPACS were a few months ago and this ‘stodgy’ area of the markets is now getting increasingly dangerous.
Completely agree. Terrible selection of new issuances lately.
Rvert–agree–the junk gets junkier.