DALLAS, TX - Creative Media & Community Trust Corporation (NASDAQ:CMCT), a real estate investment trust, has announced the redemption of its preferred stock, which will result in the issuance of common stock. The company provided notice on Thursday and Friday of last week that it would redeem approximately 2.2 million shares of Series A Preferred Stock and about 2.6 million shares of Series A1 Preferred Stock.
In lieu of cash, the redemption price will be paid in shares of Creative Media's common stock. The number of common stock shares to be issued will be determined by the volume-weighted average price (VWAP) of the common stock over the 20 trading days preceding the redemption date, as stipulated by the company's charter. Consequently, the exact number of common stock shares to be distributed is not yet ascertainable.
This transaction is exempt from registration under the Securities Act of 1933, as amended, per Section 3(a)(9) of the Act. The exemption allows for the exchange of securities without the typical registration process, provided certain conditions are met, including that the exchange is with existing security holders exclusively and no commission or other remuneration is paid for soliciting the exchange.
Creative Media, headquartered at 5956 Sherry Lane, Suite 700, Dallas, TX, is incorporated in Maryland and operates under the real estate investment trusts industry classification. The company, formerly known as CIM Commercial Trust Corp and PMC Commercial Trust /TX, has undergone name changes in the past, with the most recent change occurring in 2014.
In other recent news, Creative Media and Community Trust Corporation (CMCT) reported a rise in net operating income (NOI) across all real estate operating segments in the second quarter of 2024. Their NOI increased to $16.2 million, a $4.2 million rise from the previous year.
The company is actively developing strategies to boost its financials, including asset sales and debt reduction, despite facing high short-term interest rates and challenges in the office market.
CMCT is also progressing on two multifamily projects and a hotel renovation. The company's multifamily segment NOI was driven by occupancy gains, and the lending segment saw a 42% increase due to lower interest expenses. However, the company reported negative FFO per diluted share but raised $8.3 million in net proceeds through preferred stock issuance.
InvestingPro Insights
In light of Creative Media & Community Trust Corporation's (NASDAQ:CMCT) recent announcement regarding the redemption of preferred stock for common stock, several metrics from InvestingPro offer insights into the company's financial health and market performance. With a market capitalization of $43.29 million, CMCT is a smaller player in the real estate investment trust market. Despite a notable revenue growth of 12.93% over the last twelve months as of Q2 2024, analysts are not optimistic about the company's profitability for the year. This is reflected in the negative P/E ratio of -0.7, indicating that the company is currently not generating earnings per share.
Investors considering CMCT should note its high dividend yield of 17.89% as of the last recorded date, which is a significant return on investment through dividends alone. However, the company's stock performance has been disappointing, with a price total return of -50.18% over the past year, and the stock is trading near its 52-week low. These figures suggest that while the dividend yield is attractive, the overall stock performance has been poor.
For those interested in deeper analysis, InvestingPro provides additional tips on CMCT, including insights into its liquidity position and valuation multiples. With 12 more InvestingPro Tips available, subscribers can access a comprehensive view of the company's financial standing and market expectations. To further explore CMCT's financial metrics and analyst projections, visit InvestingPro.
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