180 Degree Capital Corp. Notes Average Discount of Net Asset Value Per Share to Stock Price for Seventh Month of Initial Measurement Period of Its Discount Management Program

Rhea-AI Summary

180 Degree Capital Corp. (NASDAQ: TURN) reported an average discount of approximately 20% between its estimated daily net asset value per share (NAV) and daily closing stock price for July 2024. The year-to-date average discount through July 2024 was about 19%, with the discount reaching 24% on July 31, 2024. These figures are part of the company's Discount Management Program, which includes two measurement periods: January 1, 2024 to December 31, 2024, and January 1, 2025 to June 30, 2025. If TURN's common stock trades at an average daily discount to NAV of more than 12% during either period, the Board will consider various options, including expanding the current $5 million stock buyback program, cash distributions, or a tender offer.

Positive

• Implementation of a Discount Management Program to address the gap between NAV and stock price
• Board's commitment to consider shareholder-friendly actions if discount exceeds 12%
• Existing $5 million stock buyback program in place

Negative

• Significant discount of 20% between NAV and stock price in July 2024
• Year-to-date average discount of 19% through July 2024
• Discount widened to 24% on July 31, 2024

Insights

Financial Analyst

The announcement from 180 Degree Capital Corp. (NASDAQ: TURN) regarding its Discount Management Program is noteworthy but not immediately impactful for investors. The company reports an average discount of approximately 20% between its estimated daily net asset value per share (NAV) and its daily closing stock price for July 2024, with a year-to-date average of 19%.

This persistent discount is significant, as it indicates that the market is valuing TURN's shares substantially below their intrinsic value. The 24% discount as of July 31, 2024, is particularly striking. However, it's important to note that closed-end funds and similar investment vehicles often trade at discounts to their NAV due to various factors, including liquidity concerns and investor sentiment.

The company's Discount Management Program, initiated in November 2023, sets a 12% threshold for the average daily discount to NAV. If exceeded during the specified measurement periods (2024 and first half of 2025), the Board will consider actions such as expanding the stock buyback program, issuing cash distributions, or initiating a tender offer.

While these potential actions could be beneficial for shareholders, they remain hypothetical at this point. The current $5 million buyback program, while positive, may not be sufficient to significantly impact the discount given the persistent gap between market price and NAV.

Investors should monitor this situation closely, as any implemented measures could potentially lead to short-term price appreciation or return of capital. However, it's important to understand that addressing the discount doesn't necessarily improve the underlying performance of the company's investments or its long-term prospects.

MONTCLAIR, N.J., Aug. 01, 2024 (GLOBE NEWSWIRE) -- 180 Degree Capital Corp. (“180 Degree Capital”) (NASDAQ: TURN), noted today that the average discount between its estimated daily net asset value per share (“NAV”) and its daily closing stock price during July 2024 and year-to-date through the end of July 2024, were approximately 20% and 19%, respectively.¹ This discount was approximately 24% on July 31, 2024.

As previously disclosed in a press release on November 13, 2023, 180 Degree Capital’s Board of Directors has set two measurement periods of 1) January 1, 2024 to December 31, 2024, and 2) January 1, 2025 to June 30, 2025, in which it will evaluate the average discount between TURN’s estimated daily NAV and its closing stock price pursuant to a Discount Management Program. Should TURN’s common stock trade at an average daily discount to NAV of more than 12% during either of these measurement periods, 180 Degree Capital’s Board will consider all available options at the end of each measurement period including, but not limited to, a significant expansion of 180 Degree Capital’s current stock buyback program of up to $5 million, cash distributions reflecting a return of capital to shareholders, or a tender offer.

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
Robert E. Bigelow
180 Degree Capital Corp.
973-746-4500
ir@180degreecapital.com

Mo Shafroth
RF Binder
Morrison.shafroth@rfbinder.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. Daily estimated NAVs used for the discount calculation outside of quarter-end dates are determined as prescribed in 180’s Valuation Procedures for Level 3 assets. Non-investment-related assets and liabilities used to determine estimated daily NAV are those reported as of the end of the prior quarter.

FAQ

What was the average discount between 180 Degree Capital's (TURN) NAV and stock price in July 2024?

The average discount between 180 Degree Capital's (TURN) estimated daily net asset value per share (NAV) and its daily closing stock price in July 2024 was approximately 20%.

What actions will 180 Degree Capital's Board consider if the average discount exceeds 12% during the measurement periods?

If the average discount exceeds 12%, the Board will consider options including expanding the current $5 million stock buyback program, cash distributions reflecting a return of capital to shareholders, or a tender offer.

What are the measurement periods for 180 Degree Capital's (TURN) Discount Management Program?

The measurement periods are 1) January 1, 2024 to December 31, 2024, and 2) January 1, 2025 to June 30, 2025.

What was the discount between 180 Degree Capital's (TURN) NAV and stock price on July 31, 2024?

The discount between 180 Degree Capital's (TURN) estimated NAV and its closing stock price on July 31, 2024, was approximately 24%.