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Firsthand Fund: 20% Upside Buying Opportunity Created By Resolution Of Proxy Fight
- SVVC is trading at a 22% discount to NAV.
- It settled a proxy contest with an activist fund (Bulldog Investors) and will return approximately 24% of NAV to shareholders via buybacks and distributions.
- Buybacks and distributions to be funded via cash on hand and liquidating publicly traded securities in its portfolio.
- Minimal downside (8%) and very attractive upside (20% in 9 months or sooner) via buybacks, distributions and compression of the spread between the market price and the NAV.
Firsthand Technology Value: A Strong Buy With Shareholder Activism And A 30% Discount To NAV
- The pullback in the tech sector has created new bargains.
- Many tech stocks have started to rebound and investors could see the same in this tech fund very soon.
- With a recent update on net asset value being at $27.43, and the shares trading for just $20, this 30% discount makes this fund too cheap to ignore.
- With the discount to net asset value at roughly 30%, shareholder activists could get "active" again and help push change and/or the share price higher.
Firsthand Technology Value: Buy At $21 Now And Get About $28 Worth Of Fast-Growth Tech And IPO Stocks
- A pullback in the tech sector has created new buying opportunities.
- The Firsthand Technology Value Fund has been making great investments in many high-profile pre-IPO stocks like Facebook, Twitter and SolarCity.
- This fund has invested in other promising companies that appear poised for an IPO, which is likely to boost net asset value even more.
- The pullback to $21 per share is excessive considering cash levels and a recently reported net asset value of more than $28 per share.
- Buy this fund now for either short-term or long-term gains as the tech sector is starting to rebound.
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Sat, Oct. 4, 3:03 PM
- The number of U.S. tech startups receiving $1B+ valuations in their first financing round rose 133% Y/Y in 1H14, says CB Insights. Meanwhile, PriceWaterhouseCoopers estimates the amount of VC funding directed towards "software" companies (includes a lot of Internet-related funding) totaled $10.1B in 1H14, up from just $4.6B a year earlier. Uber's $1.2B funding round (at a $17B valuation) helped boost PwC's figure.
- The breakneck investment pace has led a slew of high-profile VCs to warn valuations have gotten stretched, if not suggest a fresh bubble is afoot. Kleiner Perkins' Randy Komisar: "There's too much capital and there's very few places to invest it ... risk is not being priced properly and so venture capitalists are taking high-risk, high-reward bets."
- "No one's fearful, everyone's greedy, and it will eventually end," declared Benchmark's Bill Gurley in a recent WSJ interview. "I think that Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now. Unprecedented since '99."
- For their parts, Marc Andreessen and Fred Wilson have warned startups to curb their spendthrift ways. Andreessen: "When the market turns, and it will turn, we will find out who has been swimming without trunks on: many high burn rate co's will VAPORIZE."
- Nonetheless, contrasting views remain easy to find. Menlo Ventures' Venky Ganesan: "While we are in an up cycle, we are nowhere close to the top ... There are pockets of irrational exuberance, but for the most part, I think it's actually fine."
- Internet/social media ETFs: FDN, PNQI, SOCL
- Investors in late-stage startups: GSVC, SVVC
- Yesterday: Yahoo reportedly set to invest in Snapchat at $10B valuation
Fri, May. 2, 11:05 AM
- Under pressure from Phil Goldstein's Bulldog Investors, Kevin Lanids' Firsthand Technology Value Fund (SVVC +10.6%) agrees to repurchase up to $10M of stock in the open market this year and to tender for at least $20M of stock at up to 95% of NAV by the end of next January.
- Bulldog agrees to withdraw its board nominees and to stop fighting to end the fund's investment management agreement.
- Source: Press Release
- Previous: An Open Letter from Bulldog Investors
- Is GSV Capital (GSVC +1.5%) next? As of his January 9 letter to Firsthand, Goldstein was long that name as well.
Thu, Apr. 17, 6:15 PM
- "We're obviously in the throes of what feels like a correction for the small-cap and growth-equity companies," says Revolution Ventures managing partner David Golden.
- Following a Q1 that saw the highest level of U.S. VC investment since 2001 ($10.7B, up from $9.1B in Q4 and $7.5B a year earlier ), as well as a handful of late-stage deals featuring eye-popping valuations (Airbnb, Dropbox), a rapid selloff in high-beta tech stocks is yielding a sense of caution.
- Accel Partners' Jim Breyer (an early Facebook investor): "Not a board meeting goes by when at least half the meeting isn't spent on financial strategy." Venrock's Nick Beim: "We all feel like we're at the top of the cycle, and everyone's skating on new ice ... Just how thin the ice is not yet clear."
- GSV Capital's (GSVC) Michael Moe, whose firm often takes positions in late-stage startups, likes what he sees. "I think prices will get more favorable for buyers because it will be more difficult to do megadeals at megavaluations." The Firsthand Tech Value Fund (SVVC) might also get more favorable terms.
- Today's tech IPOs - Weibo and Leju - each delivered solid gains, but only did so after pricing their offerings at the low end of their respective ranges.
Wed, Mar. 26, 4:04 PM
- Aided by King's poor debut and general momentum stock weakness, U.S. and Chinese Internet stocks have fallen hard for the second time this week.
- In addition to King rival Zynga and newly-minted VR headset maker Facebook, Twitter (TWTR -7.1%) is among the leading U.S. decliners. Exactly 3 months after reaching a peak of $74.73, shares have fallen below their post-IPO opening price of $45.10. They remain well above their $26 IPO price.
- Other U.S. decliners: P -5.2%. Z -6.2%. TRLA -7%. GSVC -4.8%. SVVC -4.1%.
- Many Chinese Internet stocks have also been hit hard. Sungy Mobile (GOMO -23.2%), which posted a Q4 beat and in-line guidance yesterday afternoon, is the biggest decliner. Others: QIHU -8%. WUBA -9.5%. MOBI -10.6%. QUNR -7.8%. NQ -7%. YOD -7.6%. WBAI -7.5%. SOHU -7%. ATHM -6.5%. SFUN -6.3%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Thu, Jan. 16, 12:11 PM
- Firsthand Technology Value Fund (SVVC -0.2%) reports a preliminary NAV of $28.31/share at year end, of which $9.17/share is cash. Total return on NAV in 2013 is estimated at 25.3%.
- The fund's top 5 holdings consisted of Twitter (21.2% of NAV), Facebook (12.8%), IntraOp Medical (7.9%), Turn (5.8%), and AliphCom (4.0%).
- Shares closed yesterday at an 18.3% discount to the Dec. 31 NAV, a discrepancy that activist Bulldog Investors criticized in an open letter earlier this month.
Thu, Jan. 9, 9:26 AM
- Activist shareholder Bulldog Investors issues a public letter to Firsthand Technology Value Fund (SVVC) asking some tough questions of the close-ended VC fund.
- 2 of several points of contention: 1) "Why has SVVC filed for a $150 million rights offering while it has more than $100 million in cash and its shares trade at a discount of more than 20%?" 2) "SVVC converted from an open-end fund to a closed-end fund in April 2011 when the stock price was $27. Since then, the market, and especially tech stocks, have risen significantly. Yet, SVVC's stock price has declined by over 10%. Why?"
Dec. 30, 2013, 1:15 PM
- GSV Capital (GSVC -5.1%) and the Firsthand Technology Value Fund (SVVC -4.1%), each of which have sizable Twitter positions, aren't being spared as the microblogging leader continues to sell off.
- As SA contributors have pointed out, GSV and Firsthand, each of which hold a number of positions in growth-stage private tech companies, trade at major discounts to NAV estimates. Illuminati Investments recently estimated GSV will have an end-of-Q4 of at least $16.96/share, and Ben Axler estimated last week Firsthand had an NAV of $31.30/share as of Dec. 26.
Nov. 7, 2013, 11:15 AM
- Were investors expecting too much? Even though Twitter opened sharply higher on IPO day (shares are now up 81% to $47.06), shareholders GSV Capital (GSVC -9.5%) and the Firsthand Technology Value Fund (SVVC -7.4%) are heading south. It's worth noting many other Internet momentum plays are also selling off.
- GSVC and (to a lesser extent) SVVC have been rallying due to Twitter IPO hopes. Twitter accounted for 15.1% of GSV's net asset value at the end of Q2; the company reports after the close.
Nov. 6, 2013, 6:47 PM
- Twitter's (TWTR) IPO price is above its $23-$25 range, but below the $27 the company's underwriters were reportedly aiming for. Shares begin trading tomorrow.
- Twitter raised $1.82B through its 70M-share offering. Based on common stock outstanding, the microblogging leader's IPO valuation stands at $14.2B. If one factors outstanding options and restricted stock units, Twitter's valuation is north of $17B. (S-1)
Nov. 4, 2013, 3:33 PM
- Bloomberg reports Twitter's (TWTR) IPO has been oversubscribed, and is likely to price above its just-elevated price range of $23-$25.
- GSV Capital (GSVC -1.4%), which has already rallied strongly this year thanks to Twitter-related hopes, is ticking lower today. But the Firsthand Technology Value Fund (SVVC +2.6%) is rallying.
- More on Twitter
Nov. 4, 2013, 9:15 AM
- Twitter's (TWTR) hike, which comes amid strong demand for its IPO and a general belief its initial price range of $17-$20 was conservative, means the company is now set to raise $1.61B-$1.75B (by selling 70M shares), and sport an IPO valuation of $12.5B-$13.6B. (S-1)
- Twitter shareholder GSV Capital (GSVC) is up 3.4% premarket on the news. The Firsthand Technology Value Fund (SVVC) might also trade higher.
Oct. 25, 2013, 11:50 AM
- Twitter (TWTR) shareholders GSV Capital (GSVC -2.3%) and the Firsthand Technology Value Fund (SVVC -4.1%) are selling off after the microblogging leader set an IPO price range that spells a valuation range of $9.3B-$10.9B, well below the $14B+ valuations that have reportedly been thrown around in private share offers.
- The fact Twitter's pricing is generally viewed as an act of caution meant to avoid a repeat of Facebook's IPO, rather than business pessimism, is probably limiting today's losses. Analyst Dan Niles: "Twitter is not going to price this thing to get every single dollar off the table ... They want to price it so the stock goes up on the first day, at least."
- Meanwhile, the NYT and CNBC both report Twitter plans to price its IPO on Wednesday, Nov. 6, which means shares would begin trading on Nov. 7. The WSJ previously reported Twitter was looking to price around Nov. 6.
Oct. 24, 2013, 4:19 PM
- Twitter (TWTR) has set an IPO price range of $17-$20; that's below the prices reportedly offered for private trades. The price range translates into a valuation range of $9.3B-$10.9B. (S-1)
- Twitter is looking to raise $1.19B-$1.4B by offering 70M shares. Underwriters have a 10.5M-share overallotment option.
- It looks as if the company is trying to avoid a repeat of Facebook's IPO by pricing conservatively.
Oct. 24, 2013, 1:48 PM
- The WSJ reports Twitter (TWTR) plans to set an IPO price range in the next day or two, and that its offering could be officially priced around Nov. 6 (after which it would start trading).
- With interest in its IPO already quite high, Twitter's roadshow is reportedly expected to last only a week.
- Publicly-traded Twitter shareholders: GSVC, SVVC
- More on Twitter
Oct. 16, 2013, 3:50 PM
- Sources tell CNBC Twitter (TWTR) has set Friday, Nov. 15 "as a tentative date to begin trading." An early version of Twitter's S-1 unearthed by PrivCo had already pointed to a Nov. 15 IPO date.
- Twitter's IPO roadshow is expected to start on Oct. 25, and end about a week before the tentative IPO date. CNBC, paraphrasing a source: "Better to speed the deal up if demand is high, than delay it and risk spooking investors."
- The report comes a day after Twiiter released an update S-1 that accounted for its Q3 results, and announced it would list on the NYSE. Twitter IPO plays GSV Capital (GSVC +1.5%) and the Firsthand Technology Value Fund (SVVC +1%) are following markets higher.
Oct. 15, 2013, 6:01 PM
- In addition to disclosing it's listing on the NYSE, Twitter (TWTR) has updated its S-1 to account for its Q3 results.
- Twitter had Q3 revenue of $168.6M, and a non-GAAP net loss of $17.2M. The top-line figure represents 105% Y/Y rev. growth, nearly even with 1H's 107% growth; the net loss figure compares with a 1H level of $44.1M. GAAP net loss, which includes major stock compensation expenses, has amounted to $133.8M YTD.
- Monthly active users (MAUs) totaled 231.7M at the end of Q3, +6% Q/Q and +39% Y/Y. 44% Y/Y MAU growth was seen in Q2. U.S. MAUs +30% to 52.7M, international MAUs +41% to 179M.
- Timeline views +5% Q/Q and +50% Y/Y to 158.8M. That's a slowdown from Q2's 69% growth. There were 685 timeline views per MAU, +8% Y/Y but -1% Q/Q with slight declines in both U.S. and international levels.
- Monetization continues to improve: ad revenue per 1K timeline views was $0.97, up from Q2's $0.80 and the year-ago period's $0.65. But the gap between the U.S. figure ($2.58, up from $2.17 in Q2) and the international figure ($0.36, up from $0.30 in Q2) remains huge.
- 70% of ad revenue came from mobile, up from 65% in Q2. 76% of MAUs used mobile devices to access Twitter vs. 75% in Q2.
- Publicly-traded Twitter shareholders: GSVC, SVVC
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