Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SuRo Capital Corp (SSSS, Financial) has made significant investments in AI, with AI investments now representing 23% of their portfolio.
- The company has invested approximately $65 million in sought-after private companies, including $55 million in AI companies.
- SuRo Capital Corp (SSSS) has a balanced portfolio with late-stage companies like ServiceTitan, Canva, and Whoop, which are well-positioned for potential IPOs.
- The company has successfully monetized public positions, generating realized gains, such as the sale of PublicSquare shares.
- SuRo Capital Corp (SSSS) has a strong liquidity position with $39.5 million in liquid assets, including $32.7 million in cash.
Negative Points
- The company experienced a decrease in NAV per share from $6.94 to $6.73, driven by net realized losses and investment losses.
- SuRo Capital Corp (SSSS) reported a realized loss of approximately $6.6 million from the sale of OneValley, Inc.
- The company wrote off investments in Churchill Sponsor VII and YouBet Technology due to dissolutions.
- There is a significant concentration risk, with the top five positions accounting for 47% of the investment portfolio.
- The company faces risks associated with market volatility and uncertainties that could impact future performance.
Q & A Highlights
Q: Can you provide an overview of SuRo Capital's recent investments in AI companies?
A: Mark Klein, Chairman and CEO, highlighted that SuRo Capital has invested approximately $65 million in private companies during the second half of 2024, with $55 million allocated to AI companies. Notable investments include OpenAI, CoreWeave, and VAST, which together represent a significant portion of their portfolio. These investments are part of SuRo Capital's strategy to capitalize on the growth of AI and provide shareholders access to leading AI companies.
Q: What is the current status of SuRo Capital's portfolio and its positioning for future IPOs?
A: Mark Klein mentioned that SuRo Capital's portfolio includes late-stage companies like ServiceTitan, Canva, Whoop, and Liquid Death, which are well-positioned for potential IPOs. The company believes these investments, along with their AI portfolio, create a balanced portfolio offering shareholders access to exciting private technology companies ahead of their potential IPOs.
Q: How has SuRo Capital's NAV per share changed in the third quarter of 2024?
A: Allison Green, CFO, reported that the NAV per share decreased from $6.94 in Q2 to $6.73 as of September 30, 2024. This decrease was primarily driven by a net realized loss on portfolio investments, net investment loss, and realized loss on the partial repurchase of 6% notes. However, it was partially offset by a net change in unrealized appreciation of investments and the impact of stock-based compensation.
Q: What are the details of SuRo Capital's note repurchase and convertible note issuance programs?
A: Allison Green explained that SuRo Capital's Board approved a note repurchase program for up to $35 million of 6% notes due 2026. Additionally, the company entered into a note purchase agreement for up to $75 million of 6.5% convertible notes due 2029. The proceeds from these notes will be used for repaying outstanding debt, making investments, and other corporate purposes.
Q: How is SuRo Capital enhancing shareholder value through its share repurchase program?
A: Allison Green stated that SuRo Capital's Board authorized a $4.3 million expansion to the share repurchase program, bringing the total to $64.3 million, and extended it through October 31, 2025. Since the program's inception, over 6 million shares have been repurchased, with approximately $25 million remaining authorized for future repurchases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
