Cbdmd INc (YCBD) has disclosed a new risk, in the Corporate Activity and Growth category.
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Cbdmd Inc faces significant financial constraints due to its current capital structure, particularly the outstanding shares of Series A Preferred Stock. The company’s pursuit of strategic investments and mergers and acquisitions is hampered by the perceived burden of the Series A Preferred Stock’s dividend obligations and a hefty $50 million liquidation preference. Additionally, the change of control rights associated with these preferred shares, including a $55 million redemption right, deter potential acquisitions or asset sales, stifling opportunities to enhance shareholder value. This capitalization issue limits Cbdmd Inc’s ability to negotiate favorable terms and conditions in strategic transactions and to attract new investment, thereby posing a substantial risk to its growth ambitions.
Overall, Wall Street has a Moderate Buy consensus rating on YCBD stock based on 1 Buy.
To learn more about Cbdmd INc’s risk factors, click here.
