Update: Trading to begging tomorrow 8/18.
An initial offering of 900,000 shares at $12 is currently being offered to the public. If those shares sell out, the company reserves the right to offer an additional 1,600,000 shares for a total of up to $30 million raised in this Tier 2 offering.
The Chicken Soup for the Soul brand dates back to the early 1990’s. It started as a series of books about inspirational stories of everyday people and branched into other mediums.
This IPO offering is for the entertainment unit of the business only. According to the filing:
CSS Entertainment curates and shares video stories that bring out the best of the human spirit.
In March of 2017, the company launched a direct to consumer network called the CSS Network. This will allow the company to watch the content via subscription, fee-per view, or advertising-supported model. As a curator of content, presumably, the CSS Network could be available to third parties as well.
The company intends to list on the Nasdaq Global Market which would make this the third Reg A+ IPO to list on Nasdaq behind ShiftPixy (PIXY) and Adomani (ADOM). The joint book-running managers are HCFP/Capital Markets, Benchmark Capital, and Weild & Co. The stock is slated to trade under the symbol “CSSE”.
Online brokerage services are provided by Folio Investing. Continental Stock Transfer & Trust is the transfer agent.
This IPO has several components of interest. Most appealing is that any U.S.-based investor can participate for as little as $12.
Dude, Where’s My IPO?
In 2016, CSS Entertainment bought a majority stake the online media company A Plus. A Plus was co-founded by celebrity actor and venture capitalist, Ashton Kutcher. According to the 1-A filing, CSS Entertainment now owns 75% of A Plus while Kutcher maintains 23% ownership.
Other celebrity influencers listed in the SEC filing include Britney Spears, Lil Wayne, and George Takei. The four celebrities have a combined social media reach of 480 million followers.
Celebrity and social media influence could be a factor in a small offering such as the CSS Entertainment IPO.
For example, if Ashton Kutcher and Brittany Spears show up to ring the opening bell at Nasdaq and tweet about the event, the publicity could bring attention to the IPO. With a small float, that could mean volatile price movements.
Also notable about Kutcher in the 1-A filing:
Kutcher will serve as an executive producer and collaborate with us on all business and creative elements of two new television series relating to the positive content of A Plus and the Chicken Soup for the Soul brand.
Kutcher has a large following and a history of producing successful content. The content for his two new CSS Entertainment show is unknown at this point. His success as an executive producer on these projects could influence the stock price. Read his Wikipedia entry here to learn more about his work.
How To Invest in the Chicken Soup for the Soul Entertainment IPO
On the CSS Entertainment website, you’ll see a tab that says Invest. Here you’ll find a video message by Amy Newmark, Director, Publisher, and Editor in Chief, talking about the opportunity. You’ll also find links to participate in the IPO and step-by-step instructions.
Potential investors are directed to Folio Investing where you’ll see a welcome sign.
Many readers and subscribers of this website got their start investing in IPOs via Loyal3. See the history of the IPOs on its platform here.
Back in November 2016, Loyal3 announced they would start offering Reg A + IPOs to their investors. The company was purchased before that promise came to fruition.
This Reg A + IPO seems to be unrelated to the Loyal3 legacy. Folio Investing has their hands in many different services including FolioFirst (for former Loyal3 customers) the Folio Note Trading Platform for LendingClub (the LendingClub secondary market), private investing on VIA Folio, and many institutional and third party services.
VIA Folio isn’t new to this. The division served as the clearing broker-dealer for Myomo’s Reg A+ IPO supporting TriPoint Global Equities and Banq.co in that deal.
I reached out to the company about the CSS Entertainment IPO and to understand their platform better. Blaine McLaughlin, COO of VIA Folio had this to say:
VIA Folio is excited to be selected as the platform for the Chicken Soup for the Soul Entertainment Reg A offering. We look forward to supporting other similar issuers and their offerings in the future.
To invest in the Chicken Soup for the Soul Entertainment IPO, you’ll need to open a brokerage account with Folio Investing. Then click Private Investing in the upper right-hand side of the screen and Chicken Soup for the Soul Entertainment and follow the instructions to indicate the dollar amount of your share purchase.
Yes, to invest in this deal you’ll have to open yet another brokerage account. I have no experience with the platform, but in addition to more traditional trading services, Folio Investing has created what they call Ready-to-Go Folios which are like mini-ETFs, similar to motifs we see on the Motif Investing platform. They also offer private investing.
The minimum amount to invest in the CSS Entertainment IPO is one share, or $12. No account minimums are required, meaning any U.S.-based investor can participate by opening a Folio Investing account and buying shares.
As always, featured opportunities on Access IPOs do not equal a recommendation to buy or sell. Please read the prospectus and perform your own due diligence.
Revenue for 2016 was $8.1 million compared to $1.5 million for 2015. The company was profitable in 2016. According to the 1-A filing:
We are aggressively growing our business through a combination of organic growth, licensing and distribution arrangements, acquisitions, and strategic relationships.
Since this is a Reg A+ IPO, the closing date will vary based on share demand and the discretionary release of the 1.6 million additional Tier 2 shares. And may not happen at all.
Reg A+ IPOs share allocations are on a first come first served basis, so these offerings don’t usually become oversubscribed. Once enough investors are signed up, the deal closes. Therefore, plan for a full allocation if you choose to invest.
Disclosure: The author is long LC and MYO
Photo credit: anestiev via Pixabay