What are the tax implications for shareholders receiving the special cash dividend, and how might that influence net‑of‑tax returns?

Tax treatment and net‑of‑tax return – For U.S. investors a special cash dividend is generally taxed as ordinary income, not as a qualified‑dividend, because it is paid outside the regular dividend schedule and the holding‑period requirements are not met. The $0.43 per‑share payout will therefore be subject to the shareholder’s marginal federal income‑tax rate (10 %‑37 %) plus any applicable state tax. For a high‑income investor in the 37 % bracket the after‑tax cash received is roughly $0.27 per share (0.43 × (1‑0.37)). If the stock is trading around $8.00, the pre‑tax special‑dividend yield is about 5.4 % (0.43/8). After tax the effective yield falls to roughly 3.4 % for a 37 % taxpayer, or about 4.8 % for someone in the 22 % bracket. This drag on net‑of‑tax return can be significant for dividend‑focused portfolios and may tilt the risk‑reward calculus toward a sell‑or‑hold decision, especially if the investor is in a high tax bracket or holds the shares in a taxable account.

Market, technical and actionable implications – The ex‑dividend date (Sept 9) will typically see SMAL’s price drop by an amount close to the dividend, creating a short‑term support level near the ex‑date close less $0.43. Traders should watch the price action for a clean “gap‑down” and then assess whether the stock finds buying interest at the adjusted level; weak demand could expose a downside risk to the next technical support (around $7.30‑$7.40, per the recent 20‑day moving average). Fundamentally, the special dividend signals excess cash and confidence from management, but it also reduces the balance‑sheet capital that could be redeployed for growth. Investors in tax‑advantaged accounts (IRAs, 401(k)s) can capture the full pre‑tax yield, making the payout more attractive, while taxable‑account holders might prefer to lock in gains and re‑allocate capital to higher‑after‑tax opportunities. Actionable tip: If you’re in a high tax bracket and hold SMAL in a taxable account, consider selling a portion of the position before the ex‑date to avoid the ordinary‑income tax hit, or move the shares into a tax‑sheltered vehicle if possible; otherwise, treat the after‑tax yield (≈3‑5 %) as the true return and compare it to alternative income‑generating assets before deciding to stay invested.