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SuRo Capital Corp. Second Quarter 2022 Preliminary Investment Portfolio Update – Yahoo Finance

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SuRo Capital Corp.

Net Asset Value Anticipated to be $9.00 to $9.50 Per Share

NEW YORK, July 11, 2022 (GLOBE NEWSWIRE) — SuRo Capital Corp. (“SuRo Capital”, the “Company”, “we”, “us”, and “our”) (Nasdaq: SSSS) today provided the following preliminary update on its investment portfolio for the second quarter ended June 30, 2022.

“Equity market performance in the first half of 2022 was the worst first half performance in over 50 years. While we exited a significant portion of our portfolio in 2021 and have maintained over 40% of our investable assets in cash, we also experienced a challenging quarter. Based on information presently available, for the quarter ended June 30, 2022, we anticipate SuRo Capital’s net asset value to be approximately $9.00 to $9.50 per share,” said Mark Klein, Chairman and Chief Executive Officer of SuRo Capital. SuRo Capital’s net asset value was $12.22 per share as of March 31, 2022 and $16.56 per share as of June 30, 2021.

Klein continued, “However, the macroeconomic challenges that led to these broader market declines have also provided a robust pipeline of primary and secondary investment opportunities. We are seeing private companies seeking primary financing at flat or discounted prices and private shareholders approaching us for secondary sales at discounted rates to recent financing rounds. To that end, during the second quarter, we added two new companies to our investment portfolio: Whoop, Inc. and EDGE Markets, Inc. (via SuRo Capital Sports LLC). We also made a follow-on investment in Shogun Enterprises, Inc. (d/b/a Hearth). With over $150.0 million in investable capital at quarter end, we remain confident and opportunistic in seeking out compelling, high-growth companies.”

“As we have consistently demonstrated, SuRo Capital is committed to initiatives that enhance shareholder value and we believe the market is currently undervaluing our portfolio. Accordingly, in March, our Board of Directors authorized an additional $15.0 million for share repurchases. Since that increase, we have repurchased over 1 million shares for approximately $8.3 million. Given the significant discount at which our stock is trading compared to net asset value, coupled with the extreme market volatility, we determined the current continuation of the Share Repurchase Program to be an efficient and accretive deployment of capital,” Klein concluded.

As previously reported, SuRo Capital’s net assets totaled approximately $380.7 million, or $12.22 per share, at March 31, 2022 and approximately $439.6 million, or $16.56 per share, at June 30, 2021. As of June 30, 2022, SuRo Capital’s net asset value is estimated to be between $9.00 and $9.50 per share. This range includes a customary discount to the quarter-end pricing of public shares subject to certain lock-up provisions at quarter-end.

As of June 30, 2022, there were 30,325,187 shares of the Company’s common stock outstanding.

Investment Portfolio Update

At June 30, 2022, SuRo Capital held positions in 40 portfolio companies – 32 privately-held and 8 publicly-held, some of which may be subject to certain lock-up provisions.

During the three months ended June 30, 2022, SuRo Capital made the following investments:

Portfolio Company

Investment

Transaction Date

Amount

Shogun Enterprises, Inc. (d/b/a Hearth)

Convertible Note

5/2/2022

$0.5 million(1)

EDGE Markets, Inc.

Series Seed Preferred

5/18/2022

$0.5 million(2)

Whoop, Inc.

Series C Preferred

6/30/2022

$10.0 million(3)

___________________

(1)

Represents a follow-on investment.

(2)

Investment made through SuRo Capital Sports, LLC.

(3)

Completed as a secondary transaction.

During the three months ended June 30, 2022, SuRo Capital exited or received proceeds from the following investments:

Portfolio Company

Transaction Date

Shares Sold

Average Net Share Price(1)

Net Proceeds

Realized Gain/(Loss)

New Lake Capital Partners, Inc.(2)

Various

3,676

$21.02

$0.1 million

<$0.1 million

Rent the Runway, Inc.(3)

Various

50,000

$3.62

$0.2 million

($0.6 million)

Residential Homes For Rent, LLC (d/b/a Second Avenue)

Various

N/A

N/A

$0.3 million(4)

$-(4)

Rover Group, Inc.(5)

Various

431,591

$5.52

$2.4 million

$1.1 million

True Global Ventures 4 Plus Pte Ltd

5/31/22

$0.9 million

$0.2 million

___________________

(1)

The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable

(2)

As of June 30, 2022, SuRo Capital held 247,443 remaining NLCP public common shares.

(3)

As of June 30, 2022, SuRo Capital held 289,191 remaining RENT public common shares.

(4)

During the three months ended June 30, 2022, approximately $0.3 million was received from Residential Homes For Rent, LLC (d/b/a Second Avenue) related to the 15% term loan due December 23, 2023. Of the proceeds received, approximately $0.3 million repaid a portion of the outstanding principal and the remaining was attributed to interest.

(5)

As of June 30, 2022, SuRo Capital held 364,046 remaining ROVR public common shares.

Subsequent to quarter-end, through July 8, 2022, SuRo Capital exited or received proceeds from the following investments:

Portfolio Company

Transaction Date

Shares Sold

Average Net Share Price(1)

Net Proceeds

Realized Gain/(Loss)

Enjoy Technology, Inc.(2)

Various

626,955

$0.38

$0.2 million

($3.0 million)

Rent the Runway, Inc.(3)

Various

15,000

$3.43

$0.1 million

($0.2 million)

Rover Group, Inc.(4)

Various

70,000

$3.93

$0.3 million

$0.1 million

__________________

(1)

The average net share price is the net share price realized after deducting all commissions and fees on the sale(s), if applicable.

(2)

As of July 8, 2022, SuRo Capital held 320,342 remaining ENJY public common shares.

(3)

As of July 8, 2022, SuRo Capital held 274,191 remaining RENT public common shares.

(4)

As of July 8, 2022, SuRo Capital held 294,046 remaining ROVR public common shares.

Share Repurchase Program

Since inception of the Share Repurchase Program in August 2017, SuRo Capital has repurchased over 5.8 million shares of its common stock for an aggregate purchase price of approximately $38.6 million.

On March 13, 2022, the Company’s Board of Directors authorized a $15.0 million expansion of the Share Repurchase Program to $55.0 million. During the quarter ended June 30, 2022, under the Share Repurchase Program, the Company repurchased 855,159 shares of its common stock for approximately $6.9 million. The dollar value of shares that may yet be purchased by the Company under the Share Repurchase Program is approximately $16.4 million. The Share Repurchase Program is authorized through October 31, 2022.

Under the Share Repurchase Program, the Company may repurchase its outstanding common stock in the open market provided it complies with the prohibitions under its insider trading policies and procedures and the applicable provisions of the Investment Company Act of 1940, as amended, and the Securities Exchange Act of 1934, as amended.

Preliminary Estimates and Guidance

The preliminary financial estimates provided herein are unaudited and have been prepared by, and are the responsibility of, the management of SuRo Capital. Neither our independent registered public accounting firm, nor any other independent accountants, have audited, reviewed, compiled, or performed any procedures with respect to the preliminary financial data included herein. Actual results may differ materially.

The Company expects to announce its second quarter results in early August 2022.

Forward-Looking Statements

Statements included herein, including statements regarding SuRo Capital’s beliefs, expectations, intentions, or strategies for the future, may constitute “forward-looking statements”. SuRo Capital cautions you that forward-looking statements are not guarantees of future performance and that actual results or developments may differ materially from those projected or implied in these statements. All forward-looking statements involve a number of risks and uncertainties, including the impact of the COVID-19 pandemic and any market volatility that may be detrimental to our business, our portfolio companies, our industry, and the global economy, that could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Risk factors, cautionary statements, and other conditions which could cause SuRo Capital’s actual results to differ from management’s current expectations are contained in SuRo Capital’s filings with the Securities and Exchange Commission. SuRo Capital undertakes no obligation to update any forward-looking statement to reflect events or circumstances that may arise after the date of this press release.

About SuRo Capital Corp.

SuRo Capital Corp. (Nasdaq: SSSS) is a publicly traded investment fund that seeks to invest in high-growth, venture-backed private companies. The fund seeks to create a portfolio of high-growth emerging private companies via a repeatable and disciplined investment approach, as well as to provide investors with access to such companies through its publicly traded common stock. SuRo Capital is headquartered in New York, NY and has offices in San Francisco, CA. Connect with the company on Twitter, LinkedIn, and at www.surocap.com.

Contact
SuRo Capital Corp.
(650) 235-4769
IR@surocap.com

Media Contact
Bill Douglass
Gotham Communications, LLC
Communications@surocap.com

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Despite Bold Investment, Only Gavi Has The Messi Qualities Barcelona Craves – Forbes

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If you minus the squad investment controversy, and the need for Barcelona to reestablish itself as king in Spain and Europe again, there is another dimension to its sizeable summer transfer spending. It’s still trying to plug an 18-year-old gap: Lionel Messi’s time in the Blaugrana first team.

18 years. That’s the age of perhaps its most valuable young player: Gavi. For all the talk of striker Robert Lewandowski, defender Jules Koundé and the other major Camp Nou signings, it’s the young Spanish midfielder set for arguably the defining spell at the club. It should determine whether he and Barcelona come of age.

Going by some indicators, Gavi already has. So far, Barcelona has fended off any interest in him, with Liverpool among the European heavyweights supposed to have eyed the teenager, whose liveliness and trickery have captured many people’s imagination.

Where he wishes to play is still anyone’s guess, with some rumors that a highly anticipated contract renewal depends on whether another player, Manchester City playmaker Bernardo Silva, becomes yet another blockbuster addition. That is despite it not yet registering signings with La Liga. In any case, the idea that Barcelona could make him second fiddle to the Portuguese could be a dealbreaker for the academy graduate. As good as Bernardo is, his employer would do worse than listen to its talent, as his stock at 18 indicates just how precious a player he is, even now.

Barcelona, though, is under pressure. Failure to turn big dollars—also spent on Vegas clásico match-winner Raphinha—into success quickly could see the board flailing around even more next year. While everyone has to pull their weight, if Gavi makes the telling difference from midfield, that will tell us a lot about him and Barcelona moving forward.

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Holding onto him and similarly revered Pedri is more vital than ever. If this spending operation doesn’t work out, it will need to—at least—have its young stars committed to the longer-term project. Sportively and commercially, they could prove trump cards in the future, with their marketability and commercial value likely to boom in the coming years, as Messi’s did.

Keeping these players happy and, crucially, ensuring it can afford to keep them—which finally snapped with Messi—will mean it has two valuable assets down the line. As the Financial Times cited, 19-year-old Pedri is the CIES Football Observatory’s fourth-most valuable player worldwide.

Gavi is not Messi and never will be. Nor will anyone, for that matter. But on previous evidence, Barcelona benefits from players in the Gavi mold—agile, precise passers and tricky to dispossess when on the ball. Barcelona must keep a successful Gavi at all costs, assuming its curious financial operations and La Liga’s vigilance permit it.

That’s especially pertinent when you consider the man nurturing him pitch-side. Xavi perfected the same central midfield role during Barcelona’s golden days, understanding the position inside-out. Despite his lack of experience coaching in Europe, one key benefit to recruiting Xavi was his tactical nous and appreciation of the game—clear to see during his playing days at the team he now manages.

At a juncture when Barcelona is selling more of itself for short-term gain, the diminutive teenager epitomizes what many soccer romantics associate with the Blaugrana at its best—a side with a clear identity thanks to players in the Gavi-Pedri mold. Losing that would be a blow.

By no means has Barcelona deserted its youth during this mammoth spending spree. Ansu Fati, another promising Spaniard, is a cog in Barcelona’s plans and hopes for an injury-free run when the action resumes. Nico González, who accrued more experience last campaign, is another.

But if Barcelona’s business hasn’t finished, it risks impulsivity over sustainability. Barcelona’s seasonal acquisitions are all 25 or over and may be used as quick fixes, replacing a more considered plan. Get the balance right, and everything can click. Albeit a season-opening game, Lewandowski’s seller Bayern Munich is fresh off dismantling Eintracht Frankfurt thanks to a blend of top recruit Sadio Mané and—more so—its nurtured young midfielder Jamal Musiala. That’s the mix Barcelona needs.

For all the hype surrounding the fresh faces, there is no player like Gavi. And there is no closer imitation of Messi than the youngster either. And it’s timely, with a growing clamor for his return in some capacity. In the meantime, Barcelona should focus on recreating the Argentine’s spirit with the crop it already has. That’s not easy to buy.

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Berkshire Hathaway reports operating earnings surge, but posts big investment loss amid market rout – CNBC

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In this article

An Andy Warhol-like print of Berkshire Hathaway CEO Warren Buffett hangs outside a clothing stand during the first in-person annual meeting since 2019 of Berkshire Hathaway Inc in Omaha, Nebraska, U.S. April 30, 2022.
Scott Morgan | Reuters

Berkshire Hathaway‘s operating profits jumped in the second quarter despite fears of slowing growth, but Warren Buffett’s conglomerate was not immune to the overall market turmoil.

The conglomerate’s operating earnings — which encompass profits made from the myriad of businesses owned by the conglomerate like insurance, railroads and utilities — totaled $9.283 billion in the second quarter of 2022, Berkshire reported Saturday morning. It marked a 38.8% increase from the same quarter a year ago.

However, the company posted a $53 billion loss on its investments during the quarter. The legendary investor again asked investors to not focus on the quarterly fluctuations in its equity investments.

“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” Berkshire said in a statement.

Stocks tumbled into a bear market during the second quarter after aggressive rate hikes from the Federal Reserve to tame soaring inflation sparked fears of a recession. The S&P 500 posted a more than 16% quarterly loss – its biggest one-quarter fall since March 2020. For the first half, the broader market index dropped 20.6% for its largest first-half decline since 1970.

The conglomerate’s Class A stock fell more than 22% in the second quarter, and it’s now down nearly 20% from an all-time high reached March 28. Still, Berkshire’s stock is outperforming the S&P 500 significantly, down 2,5% versus the equity benchmark’s 13% loss year to date.

Berkshire said it spent approximately $1 billion in share repurchases during the second quarter, bringing the six-month total to $4.2 billion. However, that’s a slower repurchase pace than the one seen in the first quarter, when the company bought back $3.2 billion of if its own stock.

The conglomerate showed a massive cash hoard of $105.4 billion at the end of June even though the giant has been more active in deal-making and picking stocks.

The “Oracle of Omaha” has been steadily adding to his Occidental Petroleum stake since March, giving Berkshire a 19.4% Occidental stake worth about $10.9 billion. Occidental has been the best-performing stock in the S&P 500 this year, more than doubling in price on the back of surging oil prices.

In late March, the company said it agreed to buy insurer Alleghany for $11.6 billion — marking Buffett’s biggest deal since 2016.

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How Can We Prevent Another Guo's GTV Investment Scheme? – The Deep Dive

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Almost a year ago, the Securities and Exchange Commission (SEC) issued a cease-and-desist on Steve Bannon and Guo Wengui’s GTV Media Group, along with parent firm Saraca Media Group and Guo’s Voice of Guo Media. The collective has been identified as offering unregistered securities and was able to raise US$487 million from more than 5,000 investors between April 2020 to June 2020.

While all is said and done–the respondents were ordered to pay around US$539.4 million in disgorgement and penalties and has paid around US$455.5 million back so far–one could wonder how this kind of investment scheme slipped through the cracks.

Second-hand retail investment

In April 2020, months before the US general elections, GTV and Saraca launched a stock offering to sell between 20 million and 200 million shares of GTV common stock at US$1.00 per share, representing Saraca’s 10% equity in GTV. In total, the entities were able to sell approximately US$339 million worth of shares to more than 1,000 investors. Based on the company’s promotion about the stock offering, the minimum amount for investing was at US$100,000.

But that was not enough for the companies. The Guo-led media firms also tapped Voice of Guo–giving the latter a one-page Limited Purpose Agency Agreement–to distribute further GTV shares for investors who want to put in investments below the US$100,000-minimum.

“VOG then solicited investors and collected investor funds for the purpose of purchasing shares of GTV stock on their behalf. There was no minimum investment amount to invest in the Stock Offering through VOG and investment amounts were generally in the amount of $100 or more,” read the SEC decision back in September 2021.

The move raised an additional US$114 million from more than 4,500 investors. None of these investors who bought through Voice of Guo were ultimately issued shares.

In both offerings, the majority of the investors were unaccredited.

While pooling funds for an investment is a common practice, one could argue the limits (or the lack thereof) to which retail investment can go–especially through a second-hand agent at that.

Invest-ception

A typical investment is usually based on an investor’s faith in the investee’s corporate governance, including business and investment acumen. While technically not illegal, investing pooled investments in another investment vehicle that will in turn utilize it to hedge its own investment bets is arguably far too removed from control of the original investee.

Shortly after raising the funds from the stock offering, Saraca is said to have transferred US$100 million to a certain “Hedge Fund A for purposes of investing in the fund.” The hedge fund takes positions in various Asian currencies, particularly the Hong Kong dollar–also arguably far from GTV’s media business in which most of the investors were sold to for their investment.

“By late July 2020, Hedge Fund A had invested $30 million of Saraca’s $100 million transfer and, to date, that $30 million investment in Hedge Fund A has lost approximately $29.2 million in value,” the decision read.

A school of thought might describe investment as learned gambling, but having a supposed freehand on utilizing funds that were invested in a specific company operating within a specific industry should at least raise some red flags.

Coins and dollars in one wallet

Completing the US$487 million investment raised by Guo’s media companies is an additional US$34 million collected from its coin offering–giving investors so-called digital assets G-Coins and G-Dollars in exchange. Most of the investors in this coin offering “invested no more than $10,000” each and the companies “never inquired as to the financial or investment background of these investors.”

As part of promoting G-Coin, GTV and Saraca launched promotional materials on its platforms, touting G-Coin’s promise to be merged into G-Dollars that would soon “be usable to purchase goods or services or exchange for gold or fiat currency.” But, apparently, it was all a smoke show.

“As part of its solicitation of G-Coin and G-Dollar investors, the G Entities did not provide investors with financial information about the plan to develop any digital asset or platform, or any written offering materials, including, for example, a white paper or private placement memorandum,” read the decision.

On top of that, investments from the coin offering–effectively tied to a more volatile digital currency–were commingled with proceeds from the stock offering, all pooled in GTV’s bank accounts.

Unregistered yet invested

What could be the most glaring slip up in this investment scheme is the fact that both securities were unregistered. Voice of Guo, which was tasked to offer stocks to investors, is also not registered with the SEC “in any capacity,” let alone a registered broker.

The commission underscored that “no registration statements were filed or in effect for the G Entities’ offers and sales of securities,” in both the stock and coin offering–a clear violation of the Section 5(a) of the Securities Act.

How they were able to offer and successfully sell unregistered securities is still a mystery, and yet not an uncommon conundrum in the investing space. An investor would be smart to avoid any unregistered offerings unsecured by protection laws; if these illegal securities were misrepresented as registered, it could represent a more sinister violation than just failing to register.

If only there was a way to warn investors about unregistered securities being offered to them…


Information for this briefing was found via the SEC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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