180 Degree Capital Corp. Notes Average Discount of Net Asset Value per Share to Stock Price for Third Month of Initial Measurement Period of its Discount Management Program
- None.
- None.
The discount of 180 Degree Capital's stock price to its net asset value (NAV) is a significant metric for investors, as it indicates potential undervaluation. A persistent discount of 20-22% suggests that the market is not fully recognizing the underlying value of the company's assets. This scenario could be attributed to various factors, such as market inefficiencies, investor perception, or specific concerns about the company's portfolio holdings.
The Board's Discount Management Program is a strategic response to this valuation gap, aiming to align the market price more closely with the NAV. Buybacks, cash distributions, or tender offers are common methods to enhance shareholder value and potentially reduce the discount. However, these actions may impact the company's cash reserves and future investment capacity. Investors should consider both the short-term liquidity benefits and the long-term growth prospects when evaluating the effects of such programs.
180 Degree Capital's focus on 'constructive activism' is noteworthy, as it suggests a hands-on approach to managing its investments, which can drive value creation. The nomination of a board candidate at comScore, Inc. (SCOR) highlights this strategy. The impact of such activism on portfolio companies can vary, but it often seeks to unlock value through operational improvements, strategic realignments, or enhanced corporate governance.
Investors should monitor how the company's activism translates into performance metrics for its holdings. While the first quarter's pullback in stock prices of some portfolio companies may raise concerns, the long-term outlook presented by the CEO, emphasizing low multiples and improving business fundamentals, could signal growth potential. The company's ability to realize this potential will be critical for narrowing the NAV discount and delivering returns to shareholders.
MONTCLAIR, N.J., April 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 March 2024 and year-to-date through the end of March 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
“The first quarter of 2024 as a whole was positive for 180 Degree Capital, both in terms of increases in our NAV and our constructive activism,” said Kevin M. Rendino, Chief Executive Officer of 180 Degree Capital. “While we experienced a pullback in the stock prices of certain of our portfolio holdings during March 2024, we believe our portfolio as a whole is well positioned for value creation in the future. This belief is supported by the historically low multiples many of our portfolio companies trade at even though their businesses continue to improve and are positioned to generate meaningful profitability and cash flows. Of specific note related to our constructive activism is that we are gratified that the Board of Directors of comScore, Inc. (“SCOR”) have agreed to nominate our proposed candidate, Matthew F. McLaughlin, at its upcoming annual meeting of stockholders.”
“While one quarter does not make a year, nor an investment cycle, we continue to be excited about our positioning and the value we believe can be created through our stock picking and constructive activism in 2024 and beyond,” added Daniel B. Wolfe, President of 180 Degree Capital. “In addition to our constructive activism engagements with SCOR and Synchronoss Technologies, Inc. (“SNCR”) through our appointment to its Board of Directors, we are actively engaging with a number of our other holdings, primarily through private communications. Should these efforts not yield the results we believe are required, we are prepared to shift to public communications. The ultimate goal of each of our engagements is to create value for all stakeholders of the businesses in which we invest, including 180 Degree Capital.”
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 daily NAV and stock price for March 2024 and year-to-date?
What will 180 Degree Capital do if the common stock trades at an average daily discount to NAV of more than 12%?
Who is the Chief Executive Officer of 180 Degree Capital?
