GSV Capital has $10.53 per share in cash & equivalents on the balance sheet, when the proceeds of its recent secondary offering are accounted for. The company's investments account for just $4.07 per share, as of May 18, 2012
I told all of you 3 weeks ago. Now it is reality. My target price is now $7, could test $5. The $10 in cash will be eaten up quickly. This portfolio has not generated any capital gains, and with the IPO market a shamble, good luck realizing any profits for the future. The market is very bad, we broke down today and could see another 5-7% correction (or worse). Buy short-term bonds,cash for now. Greece, Ireland ready to blow. Buying opportunity coming .NOT YET
Everything is worthless so buy here? Dumbest. post. ever. They hold 25 companies to varying degrees, 3 now ridiculously under water. Incase you hadn't heard, FB crushed the IPO market. The only 'easy double' from here is the sound of Moe rubbing 2 nickels together. GSVC is dead and 1 or 2 'winners' won't fix it.
These is going to live in the single digits for at least the summer. The broad market is taking everything down with, despite cash, NAV, and good intentions.
All baked into the cake. According to the market the cash is discounted and the whole portfolio is worth...zero. Yes zero. In other words Twitter is worthless, DropBox is worthless, Chegg is worthless, Gilt is worthless Bloom Energy is worthless. None of the companies are worth anything. lol Doesn't matter if they're down on FB, GRPN, or ZNGA. since all those are also marked down to zero. Buying with both fists today to average down my original $13 to around $11 and will continue to hold for a couple of years. All they need is 1 or 2 big winners for an easy double. Don't forget these markets work in their favour since they can buy more private companies at depressed levels since apparently everything is worth....zero.
There was a post by elimsii on the SVVC board that gave me a better understanding of how a company can trade under NAV and cash per share. Check out these two links:
Every closed end fund I checked on them trades below NAV and often below cash. Its apparent the market expect the managers of these closed end funds to make investments that lose money. For example, Kevin Landis of SVVC bought FB at an average of $31 per share which is currently a losing investment.
Thanks for that incredibly informative post.
Actually, since you can't explain it, it tells me that there is no validity to your negativity (other than your short position).
Stock price is based upon future expectations. Cash has no future expectation. If the market drops 50% the cash will still be worth $10.
GSVC is broken right now. The saving grace though is that cash on hand. I think Facebook is going to weaken the secondary market and there will be discounted shares out there to be had. If I'm Moe, I am figuring out where those secondary market discounts are right now, and I'm buying. That's the news I am looking for...
I am wondering how much the portfolio may take a hit on the secondary after the FB IPO. I believe that they adjust asset value of the portfolio based on valuations assigned by new rounds of financing. At least a couple got downgraded last time. Will be interesting to see what valuations are getting placed on these.
But then again Facebook is unique. That was a botched IPO on many levels. News just came out today the bankers cut Rev estimates in the middle of the roadshow and only told the big boys, not the retail investors. Thus the big sell off.
The trading action on GSVC is bad. They are "almost" 0 for 3, clinging to a small profit on Facebook. SVVC has fundamentals that GSVC doesn't have and twice the cash per share. Based on cash only, GSVC is overvalued here - however - I still think it will hover at the NAV for awhile. There is nothing to move it past that so I think you'll see the 12's to at best low 14's until something else in its portfolio comes into play. I went all in on SVVC at the bell yesterday morning and will be riding that back to its NAV. Holding off on GSVC for awhile.