Cash And Securities Of Public And Related Companies As Of Q2 2022 Of $62.7 Million Or $6.04 Per Share
MONTCLAIR, N.J., July 14, 2022 (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (NASDAQ:TURN) (“180” and the “Company”), today reported preliminary financial results as of June 30, 2022, and additional developments from the third quarter of 2022.
“While we haven’t yet finalized our results, given current market and economic dynamics, we thought it appropriate to provide an update to shareholders ahead of our normal reporting timeline,” said Kevin Rendino, Chief Executive Officer of 180. “We currently expect net asset value per share (“NAV”) as of the end of Q2 2022 will decline by 14.5-15.0% to approximately $8.30-8.35 per share. This expected decline in NAV is less than the 19% decline of the Russell Microcap Index. We purposefully kept our cash balances elevated, and the preliminary decline of our legacy private holdings was approximately 3.3%. We have made material progress in the transformation of 180 towards having a more transparent balance sheet, comprised primarily of public and related securities and cash, and these assets ended the quarter at $62.7 million, or $6.04 per share. While never happy with a decline in our NAV, our quarter decline and year to date decline was less severe than the Russell Microcap Index decline for the same periods.
While this has been a painful period for our public market holdings, we are focused on generating material shareholder value over the next few years and believe this period is giving us the opportunities to do that. We believe that every day the market shortens its time horizon to only focus its obsession with today’s talk of Russia, inflation, interest rates, and recession. We will lengthen ours to focus on owning companies whose stock prices we believe have a chance to increase materially once the dust settles. We will remain disciplined and calculated through these turbulent times. We are pleased we have maintained higher than normal cash balances
We recently wrote a short paper on our thoughts on market bottoms and recessions that can be found on our website at https://180degreecapital.com/insights/. One thing I have learned over my 34 years investing in public equities is that the market has a discount mechanism that many fail to recognize. This means the market historically moves far in advance of future economic conditions. As such, if historical trends hold, it is my opinion and you can mark my words that I believe once the financial news outlets declare the recession is over and give the “all clear” sign, the market will have already been up 30% from its bottom.
That said, nothing changes with how we seek to manage shareholder and third-party capital at 180. Our transformation has allowed us to capitalize on today's opportunities by having more liquid assets at our disposal, including the higher-than-normal cash we have kept throughout this downturn. We will be deliberate. We will be focused. We will make concentrated investments in a select few companies. That is what we have done since we started in 2017, and nothing changes today.”
“Our preliminary view of NAV reflects the information that we have available to us as of the date of this release and could change once we finalize our financial statements for June 30, 2022,” added Daniel Wolfe, President of 180. “We look forward to discussing these results with our shareholders and other interested parties on our Q2 2022 quarterly update call that we currently expect to hold at 9am Eastern Time on Tuesday, August 9, 2022.”
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.
Daniel B. Wolfe
180 Degree Capital Corp.
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 Past performance and historical market trends are not an indication or guarantee of future performance. The information discussed in 180’s whitepapers are solely the opinion of 180 Degree Capital Corp. Investing in financial markets involves a substantial degree of risk. Investors must be able to withstand a total loss of their investment. The information in any whitepapers or other materials provided by 180 is believed to be reliable and has been obtained from sources believed to be reliable, but no representation or warranty is made, expressed or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of the information and opinions.
Note: Cash amounts included in this release are net of unsettled trades.