Horizon Kinetics Stock Price, News & Analysis

Horizon Kinetics Holding Corporation (HKHC) is a financial services company in the asset management industry. Through its subsidiary investment manager, Horizon Kinetics Asset Management LLC, the company operates as an investment advisory firm that provides independent proprietary research and investment advisory services for value-based investing strategies. According to company disclosures, these strategies include the full suite of Kinetics Mutual Funds, Inc.

Horizon Kinetics Asset Management LLC focuses on long-only and alternative value-based investing strategies. The firm states that it offers independent proprietary research in support of these strategies, and manages assets across multiple product types. Company reports describe assets under management in separately managed accounts, exchange-traded funds (ETFs), mutual funds, private funds and proprietary funds.

The company is identified in news releases as Horizon Kinetics Holding Corporation (OTC: HKHC) and as the holding company for Horizon Kinetics Asset Management LLC. HKHC trades on the over-the-counter markets, and has referenced trading on the OTCQX Best Market and OTC Pink in its public communications. Horizon Kinetics describes itself as a New York City-based fund manager, with additional offices in White Plains, New York and Summit, New Jersey.

Business model and revenue sources

Based on its financial reports, Horizon Kinetics Holding Corporation primarily generates revenue from management and advisory fees. These fees are earned on assets managed in separately managed accounts, ETFs, mutual funds, private funds and proprietary funds. Company disclosures also refer to other income and fees, and to incentive fees from proprietary funds that are reflected in certain presentations of its results.

The company sponsors and manages Consolidated Investment Products ("CIPs"), which consist of certain private investment or proprietary funds. For financial reporting purposes, HKHC consolidates these funds in accordance with generally accepted accounting principles. As a result, assets and liabilities of the applicable funds appear on the company’s consolidated statements of financial condition, and the investment income, other income and expenses of these funds appear in its consolidated statements of operations. The portion of these results attributable to clients is presented as redeemable noncontrolling interests.

Horizon Kinetics explains that, when it presents results "without consolidation" of private or proprietary funds, management and advisory fees from CIPs (including incentive fees) are eliminated from consolidated revenues and then added back in advisor-only presentations. These advisor-only views are described by the company as useful because they exclude the line-item expenses of consolidated investment products and the fair value volatility of investments and digital assets within those funds.

Investment focus and exposures

Company communications indicate that growth in management and advisory fee revenue has been associated with increases in assets under management (AUM) across its various products and strategies. Multiple earnings releases attribute AUM growth and higher fees in part to changes in the market value of specific holdings, including Texas Pacific Land Corporation ("TPL") and Grayscale Bitcoin Trust ("GBTC"). The company has also reported unrealized gains and losses related to digital asset holdings, as well as unrealized gains and losses on investments and equity interests in proprietary or private funds.

Horizon Kinetics has disclosed that it benefits economically from its direct equity investments in the CIPs, and from investment management and other fees earned from those funds. It has also described additional equity investments, such as an investment in Horizon Kinetics Hard Assets, LLC, funded in part through transferred securities and used to adjust amounts payable to a related party under a revenue share agreement.

Corporate structure and transactions

Public filings and news releases describe Horizon Kinetics Holding Corporation as the holding company for Horizon Kinetics Asset Management LLC. The company has reported that, in connection with a merger transaction with Scott's Liquid Gold Inc., it converted from a limited liability company to a C corporation for federal and state income tax purposes. This conversion resulted in the recognition of a non-cash deferred income tax expense related to tax basis differences for certain assets, including unrealized gains in investments, digital assets and indefinite-lived intangible assets.

The company has also reported a reverse acquisition merger transaction with Scott's Liquid Gold-Inc. and has referenced operating expenses and goodwill impairment associated with a consumer products asset group following that merger. These disclosures indicate that HKHC’s consolidated financial statements include results and balance sheet items related to that transaction.

Capital markets and dividends

Horizon Kinetics Holding Corporation’s public communications reference its status as a public company and its trading under the symbol HKHC on the OTC markets. The company has announced that it "upgraded" to the OTCQX Best Market from the OTCID Basic Market, and has highlighted that this tier requires companies to meet certain financial standards, follow corporate governance practices, comply with U.S. securities laws and maintain current disclosures.

The company’s Board of Directors has declared recurring cash dividends per share in multiple periods, with dividend amounts referenced in quarterly and annual earnings releases. The board has described an expected quarterly dividend policy based on the company’s quarterly performance, after considering applicable income taxes and other relevant factors, while noting that any future dividend remains subject to board determination.

Real assets and strategic relationships

In a transaction announcement, Horizon Kinetics is described as a distinguished New York City-based fund manager with assets under management measured in the billions of dollars. In that context, Horizon Kinetics and FRMO Corp. agreed to transfer real estate assets, including a data center in North Carolina, to Synteq Digital in an all-equity transaction. Upon completion of this transaction, Horizon Kinetics and FRMO are expected to become shareholders of Synteq Digital. The announcement characterizes this as a partnership that aligns with Synteq Digital’s expansion in digital mining and high-performance computing sectors.

Horizon Kinetics notes that it has been a long-term client of Synteq Digital’s team and that this equity-based transaction deepens their relationship. This illustrates HKHC’s involvement in transactions that combine asset management activities with real asset ownership and digital infrastructure exposure, alongside its core advisory and research business.

Use of non-GAAP and advisor-only measures

Across its earnings releases, Horizon Kinetics presents both consolidated results and advisor-only or "without consolidation" measures. The company explains that these presentations:

• Exclude the assets, liabilities and results of consolidated investment products, other than HKHC’s direct interests.
• Remove management and advisory fees from CIPs from consolidated revenue and then present them separately.
• Highlight operating income measures that are prior to the impact of fair value measurements of investments and digital assets, which the company describes as potentially volatile from quarter to quarter.

HKHC states that stockholders’ equity and net income attributable to Horizon Kinetics Holding Corporation are not impacted by the consolidation process, even though total assets and redeemable noncontrolling interests differ between consolidated and advisor-only presentations.

Geographic footprint

According to company descriptions, Horizon Kinetics Holding Corporation, through Horizon Kinetics Asset Management LLC, maintains offices in New York City, White Plains, New York, and Summit, New Jersey. These locations support its role as a fund manager and investment advisory firm serving clients through various managed products and strategies.

FAQs about Horizon Kinetics Holding Corporation (HKHC)

• What does Horizon Kinetics Holding Corporation do?
  Horizon Kinetics Holding Corporation is a holding company for Horizon Kinetics Asset Management LLC, an investment advisory firm that provides independent proprietary research and investment advisory services for long-only and alternative value-based investing strategies, including the Kinetics Mutual Funds.
• How does Horizon Kinetics generate revenue?
  According to its financial reports, the company earns revenue primarily from management and advisory fees on assets managed in separately managed accounts, ETFs, mutual funds, private funds and proprietary funds, along with other income and fees and, in certain periods, incentive fees from proprietary funds.
• What are Consolidated Investment Products (CIPs) at Horizon Kinetics?
  CIPs are private investment or proprietary funds sponsored by the company that are consolidated for accounting purposes. Their assets and liabilities appear on HKHC’s consolidated balance sheet, and their income and expenses appear in its consolidated income statement, with clients’ interests shown as redeemable noncontrolling interests.
• Why does Horizon Kinetics present advisor-only or "without consolidation" financial measures?
  The company explains that these measures exclude the impact of consolidating private or proprietary funds, remove the expenses of consolidated investment products, and present operating income before fair value changes in investments and digital assets, which can be volatile.
• What investment exposures has Horizon Kinetics highlighted in its disclosures?
  Earnings releases have linked changes in assets under management and fee revenue to changes in the market value of Texas Pacific Land Corporation and Grayscale Bitcoin Trust, and have also discussed unrealized gains and losses on digital asset holdings and other investments.
• Where is Horizon Kinetics based?
  Horizon Kinetics describes itself as a New York City-based fund manager, with offices in New York City, White Plains, New York, and Summit, New Jersey.
• On which market does HKHC trade?
  Public announcements identify Horizon Kinetics Holding Corporation as trading under the symbol HKHC on the over-the-counter markets, including references to OTCQX Best Market and OTC Pink designations.
• Does Horizon Kinetics pay dividends?
  Yes. The company’s Board of Directors has declared recurring cash dividends per share in multiple periods, and has described an expected quarterly dividend policy that considers quarterly operating income, applicable income taxes and other factors, while retaining discretion over future dividends.
• What corporate transactions has Horizon Kinetics reported?
  HKHC has reported a reverse acquisition merger transaction with Scott's Liquid Gold-Inc. and a related conversion from an LLC to a C corporation for tax purposes, as well as a real estate and data center transaction with Synteq Digital in which Horizon Kinetics and a related party become shareholders of Synteq Digital.
• How does consolidation of funds affect Horizon Kinetics’ financial statements?
  Because certain private or proprietary funds are consolidated, HKHC’s total assets and redeemable noncontrolling interests include amounts attributable to clients. However, the company states that stockholders’ equity and net income attributable to Horizon Kinetics Holding Corporation are not affected by the consolidation process.