180 Degree Capital Corp. Reports Net Asset Value Per Share (“NAV”) of $4.50 as of June 30, 2024

Rhea-AI Summary

180 Degree Capital Corp. (NASDAQ:TURN) reported its financial results for Q2 2024, with a Net Asset Value Per Share (NAV) of $4.50 as of June 30, 2024. The company experienced a decline in NAV of 12.8% for the quarter and a 10.4% decrease year-to-date. CEO Kevin M. Rendino acknowledged the impact of market turmoil on their portfolio, particularly affecting small and microcapitalization stocks. Despite the challenges, the company remains optimistic about future opportunities and has positioned itself to take advantage of potential catalysts in the second half of 2024 or early 2025.

The company's public portfolio saw a gross total return of -10.2% for Q2 2024. 180 Degree Capital continues to focus on constructive activism to help unlock value in its investments. A conference call is scheduled for August 20, 2024, to discuss Q2 2024 results and recent developments.

Positive

• Positioned to take advantage of potential catalysts in H2 2024 or early 2025
• Added new position in Aviat Networks, Inc. (AVNW)
• Focus on constructive activism to help unlock value in investments

Negative

• NAV declined 12.8% for Q2 2024 to $4.50 per share
• NAV decreased 10.4% year-to-date
• Public portfolio gross total return of -10.2% for Q2 2024
• Stock price declined 11.7% in Q2 2024

Insights

Financial Analyst

180 Degree Capital's Q2 2024 results reveal a challenging period for small-cap investors. The company's NAV decreased by 12.8% quarter-over-quarter to $4.50 per share, reflecting the broader market turmoil. The public portfolio's gross total return was -10.2%, underperforming major indices like the Russell Microcap Index (-5.3%).

Despite the setback, management's constructive activism and strategic positioning for potential catalysts in H2 2024 or early 2025 could be pivotal. The addition of Aviat Networks (AVNW) to the portfolio signals a targeted approach to value creation. However, investors should note the 57.9% decline in NAV over the past three years, which raises concerns about the long-term effectiveness of the company's investment strategy.

Market Research Analyst

The ongoing capital flight from small and microcap stocks to large-cap companies presents both a challenge and an opportunity for 180 Degree Capital. Historical patterns suggest a potential reversion to normalized market breadth, which could benefit TURN's portfolio. However, timing such market shifts is notoriously difficult.

The company's -46.0% three-year public portfolio return (excluding SMA carried interest) significantly underperforms the Russell Microcap Index's -21.8%. This disparity raises questions about TURN's stock selection and risk management. Investors should closely monitor the company's ability to capitalize on the anticipated market normalization and the success of its activist approach in unlocking value in portfolio companies.

MONTCLAIR, N.J., Aug. 19, 2024 (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (NASDAQ:TURN) (“180 Degree Capital” and the “Company”), today reported its financial results as of June 30, 2024, and noted additional developments from the third quarter of 2024. The Company also published a letter to shareholders that can be viewed at https://ir.180degreecapital.com/financial-results.

“Our portfolio holdings were not immune to the market turmoil that resumed in Q2 2024, particularly for small and microcapitalization stocks,” said Kevin M. Rendino, Chief Executive Officer of 180 Degree Capital. “Capital continues to flow out of small and microcapitalization stocks and into a small number of large capitalization companies. I’ve seen similar periods of dislocation like this during my 35-plus-year career. If history repeats itself, at some point each of these dislocations is likely to revert to more normalized market breadth and capital returns to small and microcapitalization stocks. These moves can be quick and volatile, like we saw in the first part of Q3 2024. While past trends are not a guarantee of what the future will hold, we believe this time is not different. We believe our portfolio companies are well positioned to execute on their businesses and that, coupled with capital returning to small and microcapitalization companies, could lead to material appreciation in our net asset value during this and future investment cycles.”  

“We used Q2 2024 to position 180 Degree Capital to take advantage of certain catalysts that we believe have the potential to occur in the second half of 2024 or early 2025,” continued Daniel B. Wolfe, President of 180 Degree Capital. “These steps include adding to positions that we believe have the best opportunities for value appreciation, including a new position in Aviat Networks, Inc. (AVNW). As we have said in the past, we are investors, not traders. We would always like the catalysts identified to occur more quickly than they often do in real life. This is where our constructive activism is used to try to help management teams and boards drive to outcomes that unlock value, and it is where we are spending significant amounts of time.”

The table below summarizes 180’s performance over periods of time through the end of Q2 2024¹:

	Quarter		YTD	1 Year	3 Year		5 Year	Inception to Date
	Q2 2024		Q4 2023- Q2 2024	Q2 2023- Q2 2024	Q2 2021- Q2 2024		Q2 2019- Q2 2024	Q4 2016- Q2 2024
TURN Public Portfolio Gross Total Return (Excluding SMA Carried Interest)	-10.2%		-5.9%	-12.3%	-46.0%		14.6%	166.2%
TURN Public Portfolio Gross Total Return (Including SMA Carried Interest)	-10.2%		-5.9%	-12.3%	-44.5%		22.3%	183.6%
Change in NAV	-12.8%		-10.4%	-27.7%	-57.9%		-46.8%	-35.9%
Change in Stock Price	-11.7%		-7.6%	-14.8%	-53.0%		-35.8%	-8.5%
Russell Microcap Index	-5.3%		-0.9%	6.0%	-21.8%		30.8%	47.0%
Russell Microcap Growth Index	-7.2%		-1.6%	0.0%	-39.0%		8.9%	26.5%
Russell Microcap Value Index	-6.1%		-2.7%	7.2%	-9.2%		43.2%	57.6%
Russell 2000 Index	-3.3%		1.7%	10.0%	-7.6%		39.7%	66.6%

Mr. Rendino and Mr. Wolfe will host a conference call tomorrow, Tuesday, August 20, 2024, at 9am Eastern Time, to discuss the results from Q2 2024 and developments to date during Q3 2024. The call can be accessed by phone at (609) 746-1082 passcode 415049 or via the web at https://www.freeconferencecall.com/wall/180degreecapital. Additionally, slides that will be referred to during the presentation can be found on 180 Degree Capital’s investor relations website at https://ir.180degreecapital.com/ir-calendar.

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 Degree Capital and its holdings can be found on its website at www.180degreecapital.com.

Press Contact:
Daniel B. Wolfe
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 Degree Capital is not responsible for the contents of third-party websites.

1. Past performance is not an indication or guarantee of future performance. Gross unrealized and realized total returns of 180 Degree Capital's cash and securities of publicly traded companies are compounded on a quarterly basis, and intra-quarter cash flows from investments in or proceeds received from privately held investments are treated as inflows or outflows of cash available to invest or withdrawn, respectively, for the purposes of this calculation. 180 Degree Capital is an internally managed registered closed-end fund that has a portion of its assets in legacy privately held companies that are fair valued on a quarterly basis by the Valuation Committee of its Board of Directors, and 180 Degree Capital does not have an external manager that is paid fees based on assets and/or returns. Please see 180 Degree Capital's filings with the SEC, including its 2023 Annual Report on Form N-CSR for information on its expenses and expense ratios.

FAQ

What was 180 Degree Capital's (TURN) Net Asset Value Per Share as of June 30, 2024?

180 Degree Capital Corp. (TURN) reported a Net Asset Value Per Share (NAV) of $4.50 as of June 30, 2024.

How did 180 Degree Capital's (TURN) NAV perform in Q2 2024?

180 Degree Capital's (TURN) NAV declined by 12.8% in Q2 2024.

What was the gross total return of 180 Degree Capital's (TURN) public portfolio in Q2 2024?

The gross total return of 180 Degree Capital's (TURN) public portfolio was -10.2% for Q2 2024.

When is 180 Degree Capital (TURN) hosting a conference call to discuss Q2 2024 results?

180 Degree Capital (TURN) is hosting a conference call on Tuesday, August 20, 2024, at 9am Eastern Time to discuss Q2 2024 results and recent developments.