Great Elm Capital Corporation (GECC)

It has

GECC stock has fallen continuously since the beginning, from $11 to $3. Jeesh!!!!!!!

Market cap is "lemonade stand size." Is this right? I wouldn't touch an income stock this small, No wonder it's struggling:

From Yahoo: Market Cap $85.426M

Now this works http://www.greatelmcc.com/

GECC's not much more than a lemonade stand"

"We do not currently have any employees. Mr. Reed is our Chief Executive Officer and President and GECM’s Chief Investment Officer. Under the Administration Agreement, GECM provides the services of our Chief Financial Officer and Chief Compliance Officer.
GECM has entered into a shared services agreement with ICAM, pursuant to which ICAM will make available to GECM certain employees of ICAM, including Matt Kaplan, to provide services to GECM in exchange for reimbursement by GECM of the allocated portion of such employees’ time."

https://www.sec.gov/Archives/edgar/data/1675033/000114036121038932/ny20001400x1_n2.htm

Why is the company website inoperative? That's not a good sign.

https://www.greatelmcc.com/

Adding on pull backs - div is priority #1.

Looking for more, but low 3:30’s or lower.

It has been - however- this week like to see it get back down to 3.28-3.30 range to add another 250 shares- then hey it can go up LOL!

Good for you. The price has been moving up nicely the last two weeks.

Picked up 150 more today.

Strange there isn’t many here on this board with such an attractive and very low entry PPS. That’s ok, just picked up more shares, I’ll be happy to continue stealing them.

Added more this week and picked up more of 3 other dividend stocks all under under $5.50. That’s majority of port over last 24 months. Staying focused. For the low pos, it’s a bargain return.

I acquired more and hit the bottom dip today.

For sure Ian, I’m with you on adding. Yeah def bummer they stopped monthly switched too quarterly and suv dropped. The .10 is pretty good still, it’s what trading in low 3’s lately? It’s a bargain still. Def adding rest of summer, into fall.

Yes, the .10 is still a nice dividend, but it is now paid quarterly. Prior to the Rights Agreement in the fall and up until December of last year, this stock paid a monthly dividend of .083 which was .996 per share for the year. I still have some shares but I took profits on almost 60% of what I was holding. I'll still take the .40 per year per share and I'll be adding more of this stock in the future.

See my response to a question about the dividend change here:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=159766822

Still acquiring- loading up.

I’ve been acquiring on drops - will acquire another 5,000.

The .10 dividend is attractive, looks stable for now. Decent return for low price stock.

If thats the case, I'm out. Was in for the monthly dividend. GL

Yes. It was announced in the quarterly filings on November 9th.

http://www.investor.greatelmcc.com/static-files/b915df09-5bdf-4c02-ac58-b37eb3c51ba8

Scroll down to the next to the last page. Exhibit 99.3

GREAT ELM CAPITAL CORP. DECLARES QUARTERLY CASH DISTRIBUTION
OF $0.10 PER SHARE

WALTHAM, MA, November 9, 2020 – Great Elm Capital Corp. (“we,” “us,” “our,” “GECC,” or “Great Elm BDC”), (NASDAQ: GECC), a business development company (BDC), today announced that Great Elm BDC’s Board set the distribution for the quarter ending March 31, 2021 at $0.10 per
quarter.

The distributions will be paid in cash and covered by net investment income. The record and payment dates for the distribution are expected to be set by GECC in December pursuant to authority granted by the Board.

Peter A. Reed, GECC’s Chief Executive Officer, stated, “We were pleased to increase the cash portion of our distribution while maintaining a favorable overall return to shareholders following the completion of our rights offering. On an annualized basis, this currently represents a 9.6% yield on NAV (based on Net Asset Value of $90.8 million, or $4.18 per share, after giving effect to the rights offering) and a 15.4% yield on the November 6, 2020 closing price of $2.60.

These foot notes were also on page 24 of the Investor Presentation from November 9th which was Exhibit 99.2

The Company had previously delivered a monthly distribution of $0.083 per share.

The majority of our fourth quarter 2020 distributions will be paid in shares of common stock in order to maximize liquidity and strengthen our balance sheet.

Did GECC drop their dividend to .10 a quarter????

DT2 - I don't have a paid account so I can't reply to your private message but the answer is yes. I am still holding my shares for the .083 per share dividend.

Thanks IW, I will take a look at the investor presentation and definitely tune in to the conference call.

wdk,

The earnings announcement for the 3rd quarter ended September 30th will be on Monday, November 9th before the bell with a conference call to discuss the results at 11:00 am.

Yes, wdk.

I think it is worth the risk. You may want to wait til the middle of November for the next quarterly report. The last report was released on Aug. 7th so it may be in the next two weeks or less.

On August 10th they published an investor presentation that I found interesting on two counts. See pages 6,7,8, and 9 for the section on their acquisition of Prestige Capital Finance, LLC. Also, see page 23 for the section on maintaining the monthly dividend at $.083 for the 4th quarter.

I think the pandemic generally, and the Rights Offering at the end of August, more specifically, has some investors concerned about the future but I believe that this is a good long term investment.

Disclosure: I recently added to my position and intend on buying more after I see the November 10-Q for more info regarding what to expect in the next quarter and beyond.

been following this stock for a couple months, enticed by the .083 dividend. Its been heading downward since. I know there are only four people following this board, is this div. worth the risk? tia

Great Elm announced the results of the rights offering yesterday..."which entitled holders of rights to purchase one new share of common stock for every one right held at a subscription price of $2.95 per share."

Nice. Thanks for the $2.95's. That's a dividend yield over 30% at least until December.

"In total, the Company sold 10,761,950 shares of its common stock for aggregate gross proceeds of approximately $31.8 million."

Peter Reed said, "This capital will strengthen our balance sheet and furnish us with additional capital to continue implementing the portfolio repositioning we began in the second quarter, including by pursuing additional opportunities in the specialty finance sector."

https://finance.yahoo.com/news/great-elm-capital-corp-announces-203700651.html

Oh that makes sense. It was mentioned in the rights offering that a percentage of the dividends could be paid in cash and some in shares. I'm going to go back and read that section again.

I'm glad you got the entire amount you were entitled to. I use E-Trade and it appears I got the whole payment as cash and then E-trade re-invested it into more shares just like it is usually done.

If you are enrolled in the DRIP, it's surprising the cash portion of the dividend you received wasn't just re-invested in shares but at least you got an explanation for the discrepancy.

Thanks for the update.

So I got an explanation from Robinhood.

Hi Shane,

Thanks for reaching out about the GECC dividend. This particular dividend paid out a bit differently than common cash dividends.

GECC declared a “Dividend with Option”. The default option here was Cash. Since the cash option was prorated, shareholders received a combination of cash and stock.


So after looking at my share count I could see the additional shares. The weird thing was that the cash portion(@ .0198) of the dividend is the only portion that is listed in my account history, the other shares just showed up without being listed anywhere. I'm guessing because it was technically a cash reinvestment. And if I do the math on the other additional shares then it all works out right

Mine is on the DRIP program too, so they bought more shares, but it's always current share price on the dividend payout date. Which ended up being 3.59 a share. Anyway, I did send them a message inquiring about it, just waiting to hear back. I use Robinhood for this and a few other divvy stocks like ET and NGL, this is the 1st time it's been messed up, so it will be interesting to see what the response is.

That is weird. My account history does not show the dividend paid but when I multiply the shares I held on August 31, 2020, (the ex-dividend date) by .083 I get the amount that was credited to my account yesterday.

I have my shares in a dividend reinvestment plan so the amount paid was re-invested by purchasing more shares at $4.47 which was the share price on August 31st.

I'd check with your broker for an explanation because you should have gotten .083 per share.

Wow, I guess I need to contact my broker. My dividend history says paid at .0198 per share.

I guess it took a day to post to my account but I got the dividend that they promised, - .083 per share paid on 9/21/2020.

Interesting. My account does not show any activity, dividend or otherwise. I'll be disappointed if they reduced the dividend and didn't make an announcement other than what was said in the Rights Offering.

So I got paid a dividend today, but it was less than 25% of the expected amount of .083 per share, the payout was .0198. I don't remember seeing anything about a reduction in dividends.

The dividend declaration is also in the Prospectus released on August 31, 2020.

It's at the bottom of page 60.

It seems to me that the dilutive effect of the rights offering will not be felt until at least January of 2021 but that is why I am asking these questions on this forum to see if other GECC investors are seeing it the same way I am.

Bullish Green,

I appreciate your analysis, input and feedback.

Disclosure: I have not exercised my rights under the offering yet but plan to after a little more research and DD. I added to my position today which has no effect on the rights offering but I couldn't pass up the low price. I bought some at $3.47 this morning and more this afternoon at $3.25

8-K From August 10th

http://www.investor.greatelmcc.com/node/8671/html#gecc-ex991_6.htm

Scroll down to page 23. They've declared keeping the dividend at $0.083 though the month ending December 31, 2020.

Not sure why it's not reflected on the website here:

http://www.investor.greatelmcc.com/financial-information/distribution-information?field_nir_div_year_value=#views-exposed-form-widget-dividends-splits-block-1

but the the 8-K says it's been declared by the Board in August.

Might be time to ask Gretchen for a clarification.

I won't be buying any more until I see the next declaration. The dilution is already being felt as it's reflected in the ongoing PPS correction.

Capital has depreciated 38% since last divy so this has rapidly become very unattractive IMO.

Depending on where it finds bottom and a new payout adjustment, It may be attractive to new buyers. Current holders not so much.

Bullish Green,

Are you going to participate in the Rights Offering and buy mores shares of this BDC?

Do you see any downside to the offering? It appears any dilution mentioned in the prospectus won't be felt til at least January as the dividend has been announced for the 4th quarter.

Yes. In the August 10th 8-K and presentation they announced that the "Board set monthly distributions of $0.083 per share for the fourth quarter of 2020, through the month ending December 31, 2020."

http://www.investor.greatelmcc.com/node/8671/html#gecc-ex991_6.htm

Scroll down to page 23 of the Presentation under Capital Activity: Declared Distributions.

So why wouldn't an income investor like me be loading up at these prices with the current dividend being paid at least until December?

And why wouldn't current holders of record that have been offered the shares at a discount be exercising their rights under the offering. Maybe they are. I'm 99% sure I am.

If you still are not sure, read pages 6,7,8 and 9 under the Specialty Finance Investments section. Prestige Finance Capital, LLC sounds like a great find going back to February of 2019.

Please let me know if there is a reason not to subscribe to the offering if you can find one.

seems like a decent deal. Also seems a little silly that people are dumping shares since dividends are still locked in for Sept, if figured people would at least hold on till the EX dividend date. I haven't read anything about any major dividend cuts in the future. Have you heard anything about that?

After more DD and digging into company reports and presentations, I added to my position today at $3.37 and I'm going to respond to the rights offer and participate in the offering unless someone can talk me out of it.

Why wouldn't you exercise your right and get more shares at a 15% discount?

Is anyone here planning on exercising their rights under this new offering to purchase more shares at the offered price?

In light of the recent share price drop, it seems people are unloading there shares due to the upcoming dilution.

It appears to me that the intended use of the new capital as stated in the prospectus and the announcement makes sense in the long term.

"The Company intends to use the net proceeds from the offering primarily to (i) make opportunistic investments, in accordance with its investment objectives and policies, in assets that the Company’s external investment manager, Great Elm Capital Management, Inc., believes have become undervalued due to the current extreme market volatility, and on more attractive terms than the Company would otherwise be able to obtain under typical, less volatile market conditions and (ii) support its existing portfolio companies through the COVID-19 pandemic."

Are most of you invested here for the short term and will be hurt by the dilution or am I missing something?

Not much life in here.

I almost dumped mine too but since I have multiple brokerage accounts, I did some digging. That's why I wrote to IR. I'm glad they set it straight.

No. I missed that, BG. Thanks for posting this. I had sold a third of my position on the lower dividend listed. I'm going to have to get those shares back, and then some.

DID ANYBODY CATCH THIS?

4:31:06 PM : KJ: Charles Schwab Initial Question: Dividend Inquiry

4:33:51 PM : <> An investment professional is joining the chat.

4:33:51 PM : <> Welcome KJ. My name is Gretchen K.. I will be helping you today. Your reference number for this chat session is 7529413.

4:33:56 PM : Gretchen K.: Hello Karl! My name is Gretchen. I'm happy to help you today.

4:34:24 PM : KJ: Hi Gretchen!

4:35:20 PM : KJ: I contacted your company about 30 minutes ago but did not have all the information amidst conflicting reports.

4:36:06 PM : KJ: Your website is showing GECC a dividend of $0.0083

4:36:27 PM : KJ: TDA says the same.

4:37:01 PM : KJ: However Nasdaq and Etrade are showing $0.083 instead.

4:37:36 PM : KJ: In light of the conflicting info, I contacted Investor Relations at GECC.

4:38:08 PM : KJ: This was their reply:

4:38:27 PM : KJ: Hi KJ,

GECC pays an $0.083 per share per month distribution. Distributions have been declared through September 2020, payable in October 2020,


Thank you,

Adam Yates

Great Elm Capital Management, Inc.

800 South St.

Suite 230

Waltham, MA 02453

(p) 617.247.7675

(c) 978.985.3613

ayates@greatelmcap.com

ayates4@bloomberg.net

4:38:48 PM : Gretchen K.: OK. I'm with you so far.

4:39:30 PM : KJ: Can you please check it out and make corrections on your website. It's screwing up my statistical data.

4:40:21 PM : KJ: Not to mention I almost wanted to sell at that erroneous distribution rate.

4:41:52 PM : Gretchen K.: Let me see what we can do.

4:42:07 PM : Gretchen K.: What page are you using to see that quote?

4:43:58 PM : KJ: I'm on GECC page, Dividends tab.

4:44:14 PM : Gretchen K.: Upcoming Dividend
Upcoming Dividend Table
Announce Date Jun 25, 2020
Ex-Dividend Date Jul 30, 2020
Payment Date Aug 21, 2020
Amount $0.0083
Type Regular

4:44:42 PM : Gretchen K.: I see. So there may be an extra 0 in there.

4:45:17 PM : KJ: Also the computation makes ACCOUNT SUMMARY / INVESTMENT INCOME tab computations wrong.

4:45:42 PM : KJ: Yes, there's an extra 0.

4:46:17 PM : Gretchen K.: I can report this issue for you. We use a third party vendor for this reporting information.

4:47:41 PM : KJ: Thank you. Does that mean you also paid the last three months wrong too (according to the historical payout)? Or is this for for website data?

4:48:11 PM : KJ: That part doesn't apply to me but just asking.

4:48:17 PM : Gretchen K.: Just for website data. We pay out the dividends received from the company directly.

4:48:58 PM : KJ: Cool. Thank you for your time! Enjoy the rest of the day!

4:49:17 PM : Gretchen K.: My pleasure! Thank you for your time. Take care!

Wonder what's going on. Can't find any news to explain 20% jump in price on 4 1/2 times the normal volume.

Anybody got an idea on what we are seeing?

I added more yesterday. I'm liking the price and the monthly yield.

I added to my position today.

Just felt like I should post something to bring the discussion to the current day situation.