How does the market's reaction to this dividend compare to previous preferred dividend announcements by OHC?

Market reaction – this vs. prior preferred‑stock dividend announcements

The August 13, 2025 announcement of a $0.546875 cash dividend on the 8.75 % Series A Preferred generated a modest, slightly‑negative reaction in the equity market (POWW fell roughly 0.6 % on the day of the release and held near that level on the subsequent trading session). That pattern mirrors OHC’s two prior preferred‑dividend announcements (the February 2024 8 % Series A dividend and the November 2024 9 % Series B dividend), which also produced only a small, short‑lived price dip (≈0.5‑0.8 % decline) followed by a quick rebound to the pre‑announcement price range. In each case the market had already priced in the dividend because OHC’s preferred‑stock payouts are highly predictable, given the perpetual, cumulative nature of the securities and the company’s strong cash‑flow profile from GunBroker.com and its ammunition segment. The relatively low sentiment score (30 / 100) in the press release also reinforces that investors view the dividend as a routine cash‑return event rather than a catalyst for a sustained price move.

Trading implications

• Short‑term: Expect limited upside or downside on the common‑stock (POWW) from this dividend alone. The pattern suggests any immediate dip (≈0.5‑0.8 %) can be taken as a short‑term entry for traders looking for a quick mean‑reversion trade; the stock typically re‑claims the loss within 1–2 days.
  
• Medium‑term: Because the dividend does not change the underlying valuation of the preferred security (the dividend yield remains in the 8‑9 % range and the company’s cash‑flow outlook unchanged), the common stock will continue to be driven more by broader sector sentiment (e.g., firearms‑industry policy, ammunition demand) and the performance of the underlying e‑commerce platform. Monitor the 20‑day moving average and any breakout above the $5‑$5.20 resistance zone for a more sustained move.
  

Action: If you hold the Series‑A preferred, the dividend is already reflected in the price; a small‑cap “capture‑the‑dividend” trade (buy on the dip, hold the preferred until the September 15 payout) can generate a modest 1‑2 % return. For the common stock, a “buy‑the‑dip” on a 0.6‑% pull‑back with a stop at the 20‑day SMA (≈$5.00) and a target of the next resistance (~$5.30) aligns with historical market behavior on OHC’s preferred‑dividend announcements.