180 Degree Capital Corp. Notes Average Discount of Net Asset Value per Share to Stock Price for Fourth Month of Initial Measurement Period of Its Discount Management Program
180 Degree Capital Corp. noted a 14% average discount between its estimated daily net asset value per share and stock price in April 2024, and a 20% discount year-to-date. The company plans to evaluate discounts as part of a Discount Management Program. Kevin M. Rendino discussed challenging market conditions but expressed confidence in the value creation potential for shareholders.
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The announcement by TURN regarding the persistent discount of its stock price relative to its NAV is a noteworthy indicator of how the market perceives the intrinsic value of the company compared to the management's assessment. For investors, this gap can represent both an opportunity and a reflection of market skepticism. The fact that the discount has remained above the 12% threshold set by the company's Board may trigger strategic actions, such as a stock buyback, capital return, or tender offer, aimed at narrowing the discount and potentially providing a catalyst for a re-rating of the stock.
From a financial standpoint, the size and execution of such strategic actions should be evaluated against the company's cash position and overall capital allocation strategy. Stock buybacks can be accretive to earnings per share by reducing the number of shares outstanding, whereas cash distributions return capital directly to shareholders, which might be favored in times of market uncertainty. It is essential for investors to monitor these developments, as they can significantly impact shareholder value.
The broader market conditions highlighted by the CEO, particularly the pressure on microcapitalization stocks, are a vital context for investors to consider. The economic concerns over stagflation and enduring high-interest rates can disproportionately affect smaller companies, which often have less diversified revenue streams and higher cost of capital. However, it is also important to differentiate between market sentiment and company fundamentals. Positive business updates from portfolio holdings like Intevac, Mama's Creations and Lantronix suggest that the underlying businesses may be more resilient than the market currently appreciates.
Understanding these market sentiments is necessary as they can obscure the view of individual company performance. Assessing which companies truly have the potential to outperform in this challenging market could provide investors with key opportunities for value investment, especially when market sentiment shifts.
MONTCLAIR, N.J., May 01, 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 April 2024 and year-to-date through the end of April 2024, were approximately
As previously disclosed in a press release on November 13, 2023, 180 Degree Capital’s Board of Directors 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
“April 2024 was difficult for microcapitalization stocks, and 180 Degree Capital’s holdings were not immune to such pressures,” said Kevin M. Rendino, Chief Executive Officer of 180 Degree Capital. “It is beyond frustrating that we are back to an environment where fear has taken over investor sentiment due to concerns of stagflation and/or interest rates remaining at current levels for an extended period. The pervasive belief is that such environments disproportionately impact all microcapitalization companies unless proven otherwise. There is a perception of what might happen, and then there is the actual reality of what is happening. We know “the perception” does not accurately reflect the health or business prospects of many of our portfolio companies. For example, our portfolio holdings, Intevac, Inc. (IVAC), Mama’s Creations, Inc. (MAMA), and Lantronix, Inc. (LTRX), all provided positive updates on their businesses in April 2024. We look forward to updates from our remaining companies in May 2024, as we believe that there are more positives than negatives about their businesses that can drive value creation for 180 Degree Capital’s stockholders.”
“This market has become borderline laughable in its inability to reward any company other than those with products, or who are thought to have products, that enable artificial intelligence solutions, such as NVDA,” added Mr. Rendino. “While that statement may be an exaggeration, it is not too far off. The Russell Microcap Index is still down
“We also wanted to take this opportunity to thank 180 Degree Capital’s stockholders for their support at this year’s Annual Meeting of Stockholders,” said Daniel B. Wolfe, President of 180 Degree Capital. “Approximately
Annual Meeting of Shareholders
The Company held its Annual Meeting of Shareholders on April 15, 2024. The following votes were cast for directors:
| For | % Voted For | Withheld | % Withheld | |
| Stacy R. Brandom | 6,560,517 | 391,454 | ||
| Kevin M. Rendino | 6,607,460 | 344,511 | ||
| Richard P. Shanley | 6,569,953 | 382,018 | ||
| Parker A. Weil | 6,572,294 | 379,677 | ||
| Daniel B. Wolfe | 6,602,549 | 349,422 | ||
The following votes were cast to ratify EisnerAmper LLP as the Company's independent public accounting firm for the fiscal year ending December 31, 2024:
| For | Against | Abstain |
| 6,663,292 | 54,571 | 234,108 |
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
Mo Shafroth
RF Binder
Morrison.shafroth@rfbinder.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. 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 the average discount between 180 Degree Capital's estimated net asset value per share and its stock price in April 2024?
The average discount was approximately 14% in April 2024.
What did Kevin M. Rendino mention about the market conditions in April 2024?
Kevin M. Rendino acknowledged challenging market conditions and expressed confidence in the value creation potential for shareholders despite market pressures.
What options will 180 Degree Capital consider if its common stock trades at an average daily discount to NAV of more than 12% during the specified measurement periods?
The company will consider options including a significant expansion of the stock buyback program, cash distributions to shareholders, or a tender offer.
When did 180 Degree Capital hold its Annual Meeting of Shareholders in 2024?
The company held its Annual Meeting of Shareholders on April 15, 2024.
What percentage of outstanding common stock voted on the proposals at the Annual Meeting of Shareholders?
Approximately 70% of outstanding common stock voted on the proposals without active solicitation.
Who thanked 180 Degree Capital's stockholders for their support at the Annual Meeting of Shareholders?
Daniel B. Wolfe, the President of 180 Degree Capital, thanked the stockholders for their support.
