180 Degree Capital Corp. Announces Discount Management Program

Rhea-AI Summary

180 Degree Capital Corp. (NASDAQ:TURN) announced a Discount Management Program aimed at reducing the discount at which its common stock trades versus net asset value per share (NAV). The program involves two measurement periods, and if the stock trades at an average daily discount to NAV of more than 12% during these periods, the company's Board will consider options such as stock buyback, cash distributions, or a tender offer.

Positive

• The completion of the transformation of the business to focus on micro-cap public market investing with a constructive activist approach and cash provides flexibility and more control for generating returns for shareholders.
• The Discount Management Program demonstrates the company's commitment to minimizing any persistent discount in its share price, showing a focus on maximizing shareholder value.

Negative

• None.

MONTCLAIR, N.J., Nov. 13, 2023 (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (NASDAQ:TURN) (“180” and the “Company”), today announced a Discount Management Program (the “Program”) established to reduce the discount that 180’s common stock trades at versus net asset value per share (“NAV”) that is discussed in more detail below.

“As noted in our Q3 2023 results press release, the transformation of our business is virtually complete,” said Kevin M. Rendino, Chief Executive Officer of 180. “It has been a long road to get to the place where 97% of our assets¹ are comprised of our strategy of micro-cap public market investing with a constructive activist approach and cash.  As I have said from day one, the more transparent and easily understood our holdings are, the narrower the discount should be between our share price and our NAV. We have always stated that completion of this transformation provides flexibility and more control for our ability to generate returns for shareholders. We are pleased to announce today that we will be implementing a Discount Management Program as a first step toward seeking to further decrease the discount TURN’s common stock trades at versus NAV. This will involve using all methods and tools available to us as a registered investment company. Now that our transformation is complete, we will monitor how our stock trades relative to our NAV. We believe TURN’s common stock should not trade at the same discount it did when we first started and had nearly 80% of our holdings in legacy private holdings.”

Under terms of the Program, 180’s Board of Directors have set two measurement periods of January 1, 2024, to December 31, 2024, and January 1, 2025, to June 30, 2025. Should 180’s common stock trade at an average daily discount to NAV² of more than the current average trading discount of other equity-focused closed end funds, or 12%, during either of these measurement periods, 180’s Board will consider all available options including, but not limited to, significant expansion of 180’s stock buyback program, cash distributions, or a tender offer.

“To be clear, any decision regarding actions taken at the end of each measurement period as a result of the Program remains with 180’s Board,” said Daniel B. Wolfe, President of 180. “We believe the existence of the Program and its associated measurement periods demonstrate the continued focus of both 180’s Board and management team on taking active steps to minimize any persistent discount in 180’s share price. In the future, 180’s Board may or may not determine to extend the Program beyond June 2025.”

Mr. Rendino further noted, “The intention of this announcement is to make it clear to shareholders that we take the discount at which TURN’s common stock trades at versus NAV seriously, and are committed to taking steps to narrow it, particularly if the discount remains elevated now that our balance sheet is primarily comprised of public and public related securities.  We have always been deliberate and transparent with regard to our intentions to maximize shareholder value. We do what we say, and we believe this Program is another step towards potentially creating value for our shareholders.  We have not been in this position since the start of 180, so time will tell how TURN’s common stock will trade with respect to NAV based on this asset composition. During these measurement periods, I fully expect that management will continue to purchase TURN’s common stock in the open market during open trading windows. To be clear, the most important thing we can do is to find investments that materially increase in value so that our NAV grows from its current levels.  We believe that will have the most impactful and positive effect on TURN’s common stock price and returns for shareholders.”

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.

Press Contact:
Daniel B. Wolfe
180 Degree Capital Corp.
973-746-4500
ir@180degreecapital.com

Mo Shafroth
Peaks Strategies
mshafroth@peaksstrategies.com  

Forward-Looking Statements

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. Cash including our holdings in money-market cash sweep funds and the expected receipt of $1.3 million in April 2024 related to the sale of TARA Biosystems, Inc., to Valo Health LLC.

2. Average discount of equity focused closed-end funds calculated using Bloomberg. 180 reports its NAV publicly on a quarterly basis. Daily estimated NAVs used for the discount calculation outside of quarter-end dates are determined as prescribed in 180’s Valuation Procedures.

FAQ

What is the Discount Management Program announced by 180 Degree Capital Corp. (NASDAQ:TURN)?

The Discount Management Program aims to reduce the discount at which the company's common stock trades versus net asset value per share (NAV).

What will happen if 180's common stock trades at an average daily discount to NAV of more than 12% during the measurement periods?

The company's Board will consider options such as stock buyback, cash distributions, or a tender offer.

Who has the authority to make decisions regarding actions taken at the end of each measurement period as a result of the Program?

Any decision regarding actions taken at the end of each measurement period as a result of the Program remains with 180's Board.

What is the intention of the announcement regarding the Discount Management Program?

The intention of the announcement is to make it clear to shareholders that the company takes the discount at which its common stock trades versus NAV seriously and is committed to taking steps to narrow it, particularly with the balance sheet primarily comprised of public and public related securities.

What will management do during the measurement periods?

Management will continue to purchase TURN's common stock in the open market during open trading windows, focusing on finding investments that increase in value to positively impact the common stock price and returns for shareholders.