SuRo Capital sees Q2 net asset value dropping amid broad market slump

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SuRo Capital (NASDAQ:SSSS) CEO and Chairman Mark Klein said Monday that while his company exited a large chunk of its portfolio before the price multiples started to fall in January, "we also experienced a challenging quarter."

The business development company is expecting net asset value to drop as much as 26.4% to $9.00 per share in Q2 compared with $12.22 Q1 and $16.56 as of June 30, 2021, according to its preliminary Q2 results.

During the second quarter, SuRo (SSSS), which invests in growing, late stage, venture capital-backed private firms, deployed $0.5M in fintech Shogun Enterprises, $0.5M in EDGE Markets and $10.0M in wearable tech firm Whoop.

As for its stock repurchase program, the company has bought back 855,159 shares of its common stock for approximately $6.9M.

"Given the significant discount at which our stock is trading compared to net asset value, coupled with the extreme market volatility, we determined the current continuation of the Share Repurchase Program to be an efficient and accretive deployment of capital,” Klein said. Shares of SSSS are down over 50% Y/Y.

Take a look at how SuRo Capital fared during the first quarter.

Comments

[Sound Investor]

Coursera reported lousy earnings. Company specific or will Course Hero get caught up in an industry downturn?

[SA-NJ52]

@Senna2002

I get the lockup point will prevent them from selling

Having owned this instrument for almost 10 years, the problem has been that they sold too soon.

So the issue for me that many holdings were sold too soon and management left money....my money...on the table.

So lockup restrictions were not the issue. Bad stock timing was this issue.

The other problem is that I do not see within the current crop of holdings what I would call home runs.

So for now I will average down like @Alaska49 as there are few ways to play this market and I already own GOOOGL.

@gandc

[Be A Man]

This stock I was once in quite awhile ago is basically toast !

[SA-NJ52]

SSSS and GSVC before it, is part of my Running with the Big Dogs Stock Portfolio along with BX, BRK.B, ONEX, IEP and others.

As I have explained in previous posts, it is one of the few ways that small investors like me can participate in these companies.

They have had investments in Coursera, PLTR, TWTR and a whole host of startups...some of which have done very well.

Unfortunately this is not the time for such investments.

Historically, the company has done a poor job on selling. Hopefully they got out of their holdings in a profitable manner but that is not reflected in the stock price.

I will consider averaging down as it is a small position for me.

I am staying with SSSS for now as this is the only way to invest in such startups. Buying at the IPO or a secondary simply gives money to the founders.

@gandc

[Senna2002]

@gandc It is important to not they can't just 'sell' when they want. They are mostly subject to insider lockup agreements and usually can't sell 100% of a holding at one time.

[Alaska49]

@gandc Holding SSS and averaging down. Got some at $6.60 today which sure helped! Buying IEP when it falls in the $28 range or lower.