Release Date: March 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SuRo Capital Corp (NASDAQ:SSSS) has a strong pipeline of pre-IPO companies, including Coreweave, Canva, and OpenAI, indicating potential future gains.
• The company has made significant investments in AI infrastructure, with Coreweave, OpenAI, and Vast Data representing a substantial portion of their portfolio.
• Coreweave's anticipated IPO is expected to target a valuation greater than $35 billion, which could significantly boost SuRo Capital Corp's portfolio value.
• SuRo Capital Corp successfully exited its position in Oaklo, achieving a significant return of over 20 times the initially invested capital.
• The company has a robust share repurchase program, with approximately $25 million remaining authorized, indicating a commitment to enhancing shareholder value.

Negative Points

• Net Asset Value (NAV) declined by 16% in 2024, raising concerns about the company's overall financial performance.
• The company faces market volatility, which could impact the valuation of its portfolio and future performance.
• There is uncertainty regarding the timing and success of potential IPOs for companies in their portfolio, which could affect future returns.
• SuRo Capital Corp's largest portfolio weight on the downside has been Lanio, which has been marked down significantly.
• The company has not provided specific guidance on future NAV growth, making it difficult for investors to assess potential future performance.

Q & A Highlights

• Warning! GuruFocus has detected 2 Warning Signs with SSSS.

Q: NAV declined 16% in 2024. What is the expectation for NAV growth in 2025, and could there be additional markdowns in the legacy portfolio? A: We don't provide forward guidance on NAV due to valuation uncertainties. However, you can estimate based on current portfolio marks and anticipated IPOs like Coreweave and OpenAI. The largest markdown has been Lanio, which has been marked down significantly. Mark Klein, CEO

Q: With the full repurchase of 6% notes, will you issue more 6.5% convertible notes to increase cash and investable assets? A: We have retired $35 million of 6% notes and issued an equal amount of 6.5% convertible notes. Currently, we are comfortable with our leverage and do not plan to issue more convertible securities against our existing portfolio. Mark Klein, CEO

Q: What is the total dollar amount of pre-IPO investments, and what percentage might go public next year? A: We are hopeful for Coreweave's IPO this month. Other potential IPOs include Lime, Canva, Liquid Death, and Vast Data, depending on market conditions. These companies are expected to go public between the end of this year and early next year. Mark Klein, CEO

Q: Can you provide more details on the capital structure and recent note issuances? A: We have issued $35 million in 6.5% convertible notes due 2029, replacing the retired 6% notes. The convertible notes have a 6.5% coupon and are convertible at $7.75 per share, a 104% premium at issuance. Alison Green, CFO

Q: What are the key factors affecting the current portfolio valuation and potential future performance? A: The portfolio's valuation is influenced by market volatility and the performance of key investments like Coreweave and OpenAI. The potential IPOs and market conditions will significantly impact future performance. Mark Klein, CEO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.