180 Degree Capital Corp. Reports $6.22 Preliminary Net Asset Value Per Share, -1.6% YTD, and Liquid Public Securities and Cash of 87% of Net Assets, as of June 30, 2023
- Net Asset Value Per Share Has Increased from the End of Q2 2023 Driven by Appreciation in Value of Liquid Public Securities1
- Portfolio Is Focused on Core Positions That We Continue to Believe Have the Potential to Appreciate Materially Based on Identified Catalysts
MONTCLAIR, N.J., July 20, 2023 (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (NASDAQ:TURN) (“180” and the “Company”), today reported preliminary results as of June 30, 2023.
“We decided to pre-announce our net asset value per share (“NAV”) for Q2 2023 due primarily to the weakness in TURN’s stock and the disconnect between share price and NAV,” said Kevin M. Rendino, Chief Executive Officer of 180. “While we are frustrated with our performance in Q2 2023, we used the quarter to position TURN to benefit should certain catalysts of our holdings occur down the road. Our current belief is that some of these catalysts could materialize over the ensuing months. These catalysts primarily center around removal of capital structure overhangs through refinancing of debt, completion of strategic transactions, and/or certain companies demonstrating better corporate governance and alignment with all stakeholders. We currently believe that these catalysts, if they occur, could result in material appreciation of the value of our holdings in these companies in line with our initial investment target of at least 100%. We continue to use our constructive activism to drive these events to completion where possible.”
“Our underperformance this quarter following outperformance last quarter was primarily due to declines in value of certain of our larger holdings and led to a gross total return of our public investments of -5.8% versus +5.3% return for the Russell Microcap Index,” noted Daniel B. Wolfe, President of 180. “Company specific events at Intevac, Inc. (IVAC) and continued weakness in the price per share of Comscore, Inc. (SCOR)—even with significant improvements in its business—were large contributors to declines in our NAV. Strength in our holdings of Commercial Vehicle Group, Inc. (CVGI) and Potbelly Corporation (PBPB), coupled with renewed interest in D-Wave Quantum, Inc. (QBTS), due to its position in enabling artificial intelligence platforms, were not enough to offset our declining positions. We ended the quarter with liquid public investments representing nearly 90% of our net assets. Management continues to believe that TURN’s stock does not reflect the appropriate value of the company and its holdings. As such management continued to purchase TURN in the open market in the quarter, in addition to the significant repurchase by TURN of its stock in May 2023. We believe there is no justification, despite being 280 basis points behind the Russell Microcap Index YTD, that TURN’s stock price warrants an almost 30% discount to our NAV at the end of Q2 2023. Since our inception, we have generated a gross total return of +223.6% versus +47.1% for the Russell Microcap Index.”
“Q3 2023 has started off positively for TURN and its holdings,” added Mr. Rendino. “We run a highly concentrated portfolio and our returns will always be dependent on the companies we own and not only what happens with market indices. While this period has been maddening and difficult to wade through, we believe the inherent value of the totality of our holdings can lead to a material increase in our NAV over time. We look forward to discussing these results with our shareholders and other interested parties on our Q2 2023 quarterly update call that we currently expect to hold in early-to-mid-August 2023.”
About 180 Degree Capital Corp.
180 Degree Capital Corp. is a publicly traded registered closed-end fund focused on investing in and providing value-added assistance through constructive activism to what we believe are substantially undervalued small, publicly traded companies that have potential for significant turnarounds. Our goal is that the result of our constructive activism leads to a reversal in direction for the share price of these investee companies, i.e., a 180-degree turn. Detailed information about 180 and its holdings can be found on its website at www.180degreecapital.com.
Daniel B. Wolfe
180 Degree Capital Corp.
This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the Company's current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release. Please see the Company's securities filings filed with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the Company's business and other significant factors that could affect the Company's actual results. Except as otherwise required by Federal securities laws, the Company undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The reference and link to the website www.180degreecapital.com has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release. 180 is not responsible for the contents of third-party websites.
Note: Cash amounts included in this release are net of unsettled trades.
1. NAV as of the end of Q3 2023 may be materially different than NAV as of the date of this release.
Released July 20, 2023