SSSS - Earnings call transcript Q1 2022

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Operator

Good day, everyone, and welcome to the SuRo Capital First Quarter 2022 Earnings Conference Call.

During today’s presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open for questions. This call is being recorded today, Wednesday, May 4, 2022. I’ll now turn the conference over to Willy Lee of SuRo Capital. sir. ahead, go Please

Willy Lee

remarks copies made is financial website, to This release and press I disclosures release Green. joining the prohibited. recorded our conference today’s today’s included Officer guarantees statements Chairman in Klein; which Officer, under Capital, issued of for to our on number and is may presentation relate those our the pandemic any forward-looking future SEC. those result the a in joined our www.surocap.com from could the or corresponding of today. of by Replay of this results to, today’s reflected of company’s does form I including, available of unauthorized regarding any today call plans, today’s Actual Mark update at Allison Financial the such would webcast Chief as expectations constitute the by and our also to and actual www.surocap.com Statements business, or companies, latest or broadcast including filings, forward-looking To performance to website Capital, reproduction results intentions in condition. or website events a and note information us you a by call our portfolio information. forward-looking that customary SEC website in being future results required prepared not of to economy industry impact but call. the forward-looking slide to on SuRo from attention in differ or so forward-looking may and filings our of like differ in do materially may to am global cause time SuRo COVID-XX Please press time the of statements strictly Thank market please sec.gov. detrimental Chief future Relations, performance SuRo call Events from These visit that is on not with the law. at property suggested to to statements, www.surocap.com. Management is is obtain materially Investor statements. & undertake and risks, by SEC’s management be and limited unless and at the uncertainties, involve a described call Presentations. Today’s the our our not your financial conditions in that the estimates live and earnings Capital’s or factors, are future volatility call statements number Executive

turn Now, I to Mark Klein. would like to over call the

Mark Klein

you and Willy. you, thank for Good Thank us. afternoon, joining

first Board to have venture We are activity We the of XXXX. late-stage did firm. not a Volatile in resulted slowdown public with in SuRo quarter coupled share IPO any markets across during quarter. the the results the new quiet investments and capital a pleased Capital’s for make quarter

to continue to of we pipeline us. available have However, strong opportunities a

mission to that investment conviction our shareholder is judicious create assessing when believe pricing we a conditions, paramount potential current Given value. opportunity being in on

advantage value volatility of and over quarter share believe an on the down of than of inclusive $XXX yesterday, year-to-date the are and various capitalize of markets to NASDAQ value about the S&P per $XX.XX there dividend pipeline Capital resettle in share. XX% XX% share is the had approximately asset end share per hand opportunities million throughout the of are share as public approximately declines on $X.XX groups. $XX.XX the adjusted are in asset excited across our value more, on quarter As The existing of or achieved At its $XXX quarter, of we robust XXX net portfolio from $X.XX capital down value NASDAQ declared This industry in end roughly companies. valuations for Despite be paid as significant firm or increase Capital prepared during and we is NAV NASDAQ remain With or Roughly execute dividend XX% companies prospects to the represents during $XX.XX investible of XXXX. asset of a opportunities the per And take our end, more. per of on the share. in the highest will per late-stage basis, private and adjusted quarter, net SuRo net venture per down SuRo a million net the a the of XX% April. and environment. XX%. more dividend companies the at asset the XX% We the

demonstrated share the As believe and market consistently million. portfolio. of an March, have to enhance $X Capital committed have over value, for $XX is we our $XX shares repurchases, additional that we shareholder the the increase, that repurchase total to XXX,XXX SuRo undervaluing initiatives for bringing authorize approximately in million Since million. Board authorized currently repurchased program Accordingly is under we share Directors our

and Given to is at discount approximately top Hero, current capital. Health, and portfolio trading Global, five March accretive, the were of repurchase XX positions share investment determine value to positions the an with of These Forge we X. fair XX% significant the of market extreme Course at net Capital’s value. be Slide continuation as accounted asset the Please turn coupled the deployment Stormwind. program Aspiration compared which to volatility, stock Blink SuRo of our efficient for

the approximately Additionally, portfolio. XX, March as of positions for our of XX top accounted XX%

ability has at completed Hero, In acquisitions our now building $X.X alone, previously The C LitCharts, In acquire and for a $XXX the meets XXXX In of them million. year we the in. great XX% grew valuations. positions believe them We to acquisition results with company’s to a to and based of volume. in its valuation Course financing Forge an [indiscernible] the one significant range Symbolab, showcasing which combined their gives they acquisitive used and at has markets nature as companies trading goal accelerate thrive. funds to As significant that participated deploy billion million grow net that these $XXX to today’s both the full QuillBot, Netherlands company their amount and revenue and Hero company company for XXXX capital the subscriber learning The a revenue recent release base. degradation have of of February, of largest the continued had XX Global assets study the its XXXX, Course of and record of they’ve raised Series the advantage Course evolving in private opportunity XXXX education this December company grow fundraise to on learners. to technology a Hero’s CliffNotes position needs which companies a ecosystem with Given year-over-year in they public strategy announced financial values discussed both attractive

XXXX billion. Forge’s success was driven by XX% its to trading grew $X.X volume, in which

In extreme Since Stock of via $XX.X. traction addition, March Motive Corp. platform a brought volatility, XX, of a with extreme Intelligence, market of Forge’s The – has high reaching continues Capital in the is York company listed million. symbol Forge SPAC merger was the low stock with under data private public $XXX experienced proceeds $XX.XX its subscription market debut, completed gross in New Forge merger. FRGE officially on Exchange gain to the Global service. On

our As today position and we March at presentation mentioned in we $XX.X XX, press valued of release as million. our

of liquidity. estimate the of the volatility decline public private potential this declines how with in it can This of of using end price. accounts is volatility Given a primarily discount overview, the $X.XX our per decrease. NAV company we portfolio driven the would the as share range the impact to for of yesterday and indices, to provide the be May of as significant static Forge of current of We stock applicable high XX% our companies all by X, per future of share approximately level in Global Holding share prices shareholders volatility valuation major our overall inclusive public all thought be share. prudent impact quarter – potentially

intent it respect our is as to possible be always, as distributions. dividend transparent our As to in

gains, our constraints, lockup of with Given our opportunity timing Due this our generally and the positions. impacted present dividends distributions conditions, based – on providing additional net amount on our any we have customary realized anticipate these later to investments coupled market monetize are restrictions the public to future on customer clarity year.

As and in to lockups we have intent sell the relative is stability our our previously it when stated, marketplace. there positions public is expire

approach. this from strayed not have We

we As positions. public unrestricted approach restrictions stabilize, active to liquidating lifted methodical and and will continue markets are these our

investments thesis value. public remaining Given in shareholder being in prudent order and compelling the significant volatility to believe positions opportunities and investment gives growth in we drive liquidate both true on private our to and markets, to make most companies the public new to strategically patient, price industries, and us high saying occurring our

democratizing continue I over capital to will shareholders. hand to deliver key you Thank for we’ll venture investing We companies on as in for attention. will of ecosystem. your And with focus great value philosophy to maintain our always, our the to And that, access Allison. it

Allison Green

as Thank our detailed financial you, review Mark. and XX, more results portfolio I would of update of Mark’s like to with follow March a XXXX.

detail turn will please the share Slide on I additional X. of provide program, First, some to repurchase

Approximately six shares we and our the XXX,XXX Under Share As million. of XXXX, $XX approximately $XX an repurchased the to a of shares $XX.X for Since attend we portfolio. portfolio at common our the approximately total Please for general under to themes. million. review was quarter authorized the authorized Share Directors shares Segmented the category, of Slide largest turn by of to on Program Board services XXX,XXX XXXX. Mark currently $XX representing set mobile Since March and investment approximately we companies. Board. invested shares stock social October portfolio inception additional technology at of Program for by August fair Cloud of X% common Subsequent the our purchase technology million of of by authorized our of in of Program, repurchased the to XX% since remains March big on repurchased end have Repurchase of our X% marketplaces XX% allocation accounted is The the XXX,XXX approximately our approximately approximately category of this and approximately pursuant stock a our just less expansion, purchased of for end of for deployment stock the I the and investment investment of X. as and expire value. XX. X. Share XX, value to to accounted X,XXX,XXX of for the approximately our X% of is were a accounted data million. XX% fair of portfolio quarter XX, common million. sustainability XX, portfolio investment representing Please for as $X.X in investment XX, is themes, to investment Repurchase March plan, expanded of Share turn the stock our common expansion Repurchase than a $X.X $XX.X expansion to XXbX-X mentioned, million of $X have will allocation million our financial fair Program top million the total our the total we Repurchase March Education second of a portfolio value over on total portfolio and of Slide and portfolio

offset share per NAV quarter year is share of other $X.XX by per during per largely loss fluctuations. during realized to quarter NAV share from quarter investments net ended and March quarter. to A the increase and per per were in with first to was attributable related a of end declared an share to partially pleased per share investment $XX.XX of gains an with share decrease the smaller $X.XX $XX.XX, XX breakdown paid end consistent our on shown. quarter was notably increase $X.XX by The of $XX.XX These NAV increase to We among the appreciation $X.XX attributable increases per unrealized which dividends notably portfolio to we Also investments. NAV driven the increase as share as end to contributing share reporting. decrease at in attributable share is per subsequent most per report financial are XXXX our to of

Runway valued Partners, the quarter securities $X.XX aforementioned and as lockup XXXX at XX, at lack in SuRo March or end million Skillsoft securities, Global, represent subject to including end, The liquid public Capital’s million cash for lockup cash March The public XXXX securities than Rent at million prices enjoy unrestricted review in $XX, Finally, unrestricted restrictions and ended our positions, as This quarter held at provisions Kahoot!, We would end. to Runway $XX.X total, to discount million Rent valued certain of unrestricted $XXX.X Capital positions of the is totaled public million customary public sales public $XX.X of of our quarter NewLake restricted public quarter expired Rover to enjoy less both $X.XX and the and like securities. Forge closing our closing for public include March lockup in with related the approximately prices end, approximately approximately million other not include and $XX.X $XXX.X of and to of shares XX. quarter of In the quarter our of million as respectively. lockup end. marketability Subsequent in share provisions restrictions provision. Nextdoor. in and assets, XX, subject Nextdoor the and $XXX.X liquidity approximately I $XX.X positions

XXXX, common like your stock As That my the of Capital. would of to for SuRo March shares concludes company’s of support XX,XXX,XXX We thank interest XX, you and there outstanding. comments. were

Now Operator? I will call turn the the to the operator Q&A. to over start

Operator

[Operator you. of Instructions] first JMP we’ll to And go Kevin Securities. Thank Fultz

Michael Falco

significant is This and Thanks filling Michael Web technology you the believe my in for last in you. seeing sports opportunities taking Falco quarter’s call actually talked on Kevin. I question. you’re X. thank that for Hi, about

through in Ventures. You’re investments to active clearly SuRo technology some in True Sports, and sports have Web already your through Capital exposure Global

future. might what curious like SuRo in currently for investments the you’re evaluating the also direct in Just opportunity X Web companies there if or look

Mark Klein

much. very question. A great you Thank

have evaluating behind you in had seeing respect tailwinds SuRo awful very cetera, time we fascinating. about as behind it In awful opportunities are Obviously, broadly. we pretty Animoca deploy and at et ensuing broadly, that get the have you’re technology good starting very it have some Thank TG, Web success out areas of gambling is is great true and the fun. of and stretch valuations And companies X, when with an in to other valuations fair these that we we time small and in companies amount spend are lot deal that So Sandbox it’s space and discussed There companies an those And They’ve a and of truly a legalization investment a of some been is to some lot. talking you of Sports, question. trying setup like the to our right, aggressive And we’re others. sports we the weigh look wanted spent to capital against time. attain. present out and right spending that time for the that figure at to the to the are there the global. that obviously

Operator

from with hear Palmer And next ahead. we’ll Please Mark go BTIG.

Mark Palmer

you thanks my and Yes. for Thank taking question.

the been of indicators the the that space, the that the and on? opportunities your We verticals across know But As private investment during what’s as right you you in you remarks, mentioned all to and more you for side seeing – public anything line look cause landscape what space, been sorry, it’s that now, you you levels are focus be space in would what terms particularly on I’m carnage. capital? public aggressive seeing particularly on deploying the are there in are going any watching in the in private in valuations, private the of on are trend you

Mark Klein

out question, different great the appreciate verticals. for a as and It’s really thanks team Mark. that. your We And various always support Mark, helping in

cases achieving in most coming there And private valuations. disconnect, for actually that of in private in lead few where the markets than where higher a and the stalled. was public last markets tended markets. part And public previous As over valuations markets some for were a we’ve discussed the is quarters, while, have the to bit

are you’re obviously of sort or But increasing the You’re coming degradation done that lot round. have extensions discount security seeing at now seeing last raises a those convertible a that trend as in really the valuations. pricing, either a sort priced round the And indications of broadly broadly, there’s some primary of primary secondary of rounds are where all is in that securities future select in against structured will or markets. flat. to And upward be continue of some in companies

think market companies they so not investors private I and/or securities investors out and the at be a to early markets because necessarily higher and reticent thought were taken early would the are continue there IPO they environment, would that in that of in valuations. lot that anticipated their stock robust be to sell

Given the a in future and the levels achieve market is companies thought. markets, public that not those they lower of the in could initially public and may they decline of valuations virtual the the down much going the that significant likelihood the closing lot of near IPO be

the price us So find excited we round. us to same come when not seeing And trying lower point, points, we’re just at to level. to sellers even those again discounts to a are at significant secondaries that back price come last at that

feels a break So is at in you’re will all enough. been long parallel we’re is that when sort We’ve converge us to ring you it They bottom. to least around bell starting the you’re that at or getting if – with more public markets. don’t the pricing now of finally a

in engage companies that we comps is we’re and thank line to now opportunities right valuations realm those. at coming do into public Mark. you, now. we’re if I – what the are trying into companies mean getting with to and then private as that what look are like, But believe in are that we of the at in those is the conversations. there initiate and And like they’re that we’re attractive. we to and comps that And So see in come industries inclined

Operator

Thank you.

Ladenburg. Hickman Next we’ll hear Jon from of

Jon Hickman

this you sorry late main you in SPAC there comments, et your private valuations I’m and opportunities, dialed about on what is if talk public feelings versus and your talked think I going of the on you but about and could market cetera? Hi.

Mark Klein

support the appreciate Sure. quieted different And not unlike of for The communications as Jon, the reasons market, down again and We with same your reasons. of dramatically, for it. greatly SPAC the and market some thanks IPO some the organization. maybe

it valuations in to a public, way formation way take traditional capital in or IPO SPAC. a public more less traditional the making think are either companies through and I challenging

down slowed conditions. the combinations I of market for announcements think So have business SPAC dramatically

– the which guidance out in from regulations, the potential caused marketplace secondarily sponsor better, the think well and with banking side, I from community. the has uncertainty come the secondly as has the legal but SEC proposed as is merger both community from community, and accounting targets, the

of cause pause some proposals have there’s can people deals may understand bit into people as to – before that sort before rules a it make that, it So – a turn move those may of forward. just

SPAC of degradation gone I think names what’s the regulatory the public going performance had With market on hit than the public as the reflect – Jon the So of a harder that combination markets, in a broadly middle SPAC a quite maybe got of and a post really appreciate the The markets. of question. value indices fit is the of right of in process NASDAQ slowing it’s lot that they down, have some through and have of that the part it’s that IPO bit environment. in market SPAC consistent of of of the

Operator

further for Klein time, over We’ll additional there no remarks. this conference questions. any Mr. closing the to or at you, turn And are back

Mark Klein

out and again as We the of your our support. the the you SuRo that time are company. call we’re Thank ask. shareholders you Well, to have available, might team, taking questions interested you And further in for this whole always listen. any thanks appreciate afternoon on if all you those

Operator

conclude your conference. you does that thank And participation. We for today’s

You may now disconnect.

SuRo Capital (SSSS) 5 May 222022 Q1 Earnings call transcript