180 Degree Capital Corp. Notes Average Discount of Net Asset Value per Share to Stock Price for Eleventh Month of Initial Measurement Period of Its Discount Management Program

Rhea-AI Summary

180 Degree Capital Corp. (NASDAQ: TURN) reported an average discount between its estimated daily net asset value per share (NAV) and stock price of approximately 21% in November 2024 and 20% year-to-date through November. The company's NAV increased by approximately 26% in November, driven by the successful sale of Brightcove (BCOV) to Bending Spoons for $233 million and strategic portfolio management. The company also benefited from the sale of its Quantum (QMCO) position during a significant price rally. Management highlighted their 12.7% ownership position and track record of approximately +212% gross total return on public portfolio holdings since 2017, compared to the Russell Microcap Index's +79%.

Positive

• NAV increased by approximately 26% in November 2024
• Successful exit from Brightcove investment with 74% gain ($4.45 vs $2.55 cost basis)
• Strategic sale of entire QMCO position during price rally ($2.96 to $21.77)
• +212% gross total return on public portfolio since 2017, outperforming Russell Microcap Index
• Strong management alignment with 12.7% ownership position

Negative

• 21% average NAV discount to stock price in November 2024
• 31% NAV decline since 2017 due to legacy private portfolio losses

Insights

Financial Analyst

The significant 26% NAV increase in November, driven by Brightcove's sale and strategic portfolio management, marks a important turning point. The successful exit from BCOV at $4.45 per share versus a $2.55 cost basis demonstrates strong investment thesis execution. The complete liquidation of the QMCO position during its speculative rally from $2.96 to $21.77 shows opportunistic portfolio management.

The persistent 21% NAV discount remains concerning, but management's 12.7% ownership and the Board's commitment to discount reduction through potential buybacks, distributions, or tender offers provides downside protection. The fund's public portfolio performance of 212% since 2017, outperforming the Russell Microcap Index by 2.7x, indicates strong stock-picking capabilities despite legacy private portfolio challenges.

MONTCLAIR, N.J., Dec. 02, 2024 (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (“180 Degree Capital”) (NASDAQ: TURN), noted today that the average discount between its estimated daily net asset value per share (“NAV”) and its daily closing stock price during November 2024 and year-to-date through the end of November 2024, were approximately 21% and 20%, respectively.¹ This discount was approximately 26% on November 29, 2024, the last day of trading of the month.

As previously disclosed in a press release on November 13, 2023, 180 Degree Capital’s Board of Directors (the “Board”) has set two measurement periods of 1) January 1, 2024 to December 31, 2024, and 2) January 1, 2025 to June 30, 2025, in which it will evaluate the average discount between TURN’s estimated daily NAV and its closing stock price pursuant to a Discount Management Program. Should TURN’s common stock trade at an average daily discount to NAV of more than 12% during either of these measurement periods, the Board will consider all available options at the end of each measurement period including, but not limited to, a significant expansion of 180 Degree Capital’s current stock buyback program of up to $5 million, cash distributions reflecting a return of capital to shareholders, a tender offer, or other strategic options.

“While it has certainly taken longer than we anticipated or desired, November 2024 provides an example of the type of performance that we continue to believe is possible in future periods,” said Kevin M. Rendino, Chief Executive Officer of 180 Degree Capital. “For the month of November, our NAV increased by approximately 26%. Our investment thesis in Brightcove, Inc. (BCOV), ultimately proved correct with its announced sale to Bending Spoons for approximately $233 million, or $4.45 per share. The cost basis of our position immediately prior to this announcement was approximately $2.55 per share. As we noted in our release discussing the transaction, BCOV is a perfect example of the companies we seek to invest in. We believe we have additional companies with similar profiles in our portfolio and are actively working with them through our constructive activism to lead to what we believe could be significant value-unlocking events.”

“In addition to the BCOV announcement, our strong performance in November 2024, was aided by our active portfolio management throughout the month,” added Daniel B. Wolfe, President of 180 Degree Capital. “We increased certain positions on weakness following earnings announcements that proceeded to increase in value from their lows. We also took advantage of the sudden increase in value of Quantum Corporation (QMCO) to monetize our position in that company. In November, QMCO advanced from a low closing price per share of $2.96 to a high closing price per share of $21.77. We sold the entirety of our approximately 223,000 shares of QMCO into this rally.   We believe the rally was driven by posts on Reddit and the market’s near-term obsession with owning quantum computing-related companies. While QMCO is not technically a quantum computing company, we believe it likely benefited from having “quantum” in its name. Yes, that is crazy to us, but such naïve and incorrect associations are becoming all too common in the public markets.”

Mr. Rendino concluded, “As 180 Degree Capital’s Board continues to evaluate all potential options regarding our Discount Management Program, it is important to remember that 180 Degree Capital itself is in a position of strength to drive value creation for its shareholders. I cannot say it enough, the 12.7% ownership position of management and the Board of 180 Degree Capital, built largely through open market purchases, should make it abundantly clear that there is alignment of interests with regard to taking steps to increase 180 Degree Capital’s stock price and create value for all shareholders. Our gross total return on our public portfolio holdings of approximately +212% since 180 Degree Capital’s inception in 2017 through November 30, 2024, was approximately 2.7x the approximately +79% total return of the Russell Microcap Index. We believe this performance kept 180 Degree Capital’s predecessor company from potential insolvency given that the decline in our NAV over the same period of approximately 31% was largely due to declines in the value of the legacy private portfolio. Our public market performance has been the primary source of value creation since 2017. While the increase in NAV for November 2024 of approximately 26% is not an indication of future returns, it demonstrates what we continue to believe is possible from a concentrated portfolio of what we believe to be undervalued companies. BCOV was a core position. We have additional core positions that we currently believe have similar or larger upside to their current valuations. We will continue to focus on creating value for all of 180 Degree Capital’s shareholders, and we look forward to discussing these efforts in more detail as we are able to do so.”

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.

Press Contact:
Daniel B. Wolfe
Robert E. Bigelow
180 Degree Capital Corp.
973-746-4500
ir@180degreecapital.com

Forward-Looking Statements

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. Any discussion of past performance is not an indication of future results. Investing in financial markets involves a substantial degree of risk. Investors must be able to withstand a total loss of their investment. The information herein is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions.   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.

1. Daily estimated NAVs used for the discount calculation outside of quarter-end dates are determined as prescribed in 180’s Valuation Procedures for Level 3 assets. Non-investment-related assets and liabilities used to determine estimated daily NAV are those reported as of the end of the prior quarter.

FAQ

What was TURN's NAV discount to stock price in November 2024?

180 Degree Capital (TURN) reported an average discount of approximately 21% between its NAV and stock price in November 2024, with the discount reaching 26% on November 29, 2024.

How much did TURN's NAV increase in November 2024?

180 Degree Capital's (TURN) NAV increased by approximately 26% in November 2024.

What was TURN's return on public portfolio holdings since 2017?

180 Degree Capital (TURN) achieved approximately +212% gross total return on public portfolio holdings since 2017, outperforming the Russell Microcap Index's +79% return.