Suro Capital Corp. Q4 FY2020 Earnings Call

Good day, ladies and gentlemen, and thank you for standing by. Welcome to SuRo Capital’s Fourth Quarter and Fiscal Year 2020 Earnings Call. During today’s presentation on Wednesday, March 10, 2021, all parties will be in listen-only mode. Following the presentation, the conference will be open for questions. This call is being recorded today. I will now turn the conference over to today’s speaker, Claire Councill of SuRo Capital. Please go ahead.

Thank you for joining us on today’s call. I’m joined today by the Chief Executive Officer of SuRo Capital, Mark Klein, and Chief Financial Officer, Allison Green. Please note that a slide presentation corresponding to today’s prepared remarks by management is available on our website at www.surocap.com under Investor Relations, Events and Presentations. Today’s call is being recorded and broadcast live on our website, www.surocap.com. Replay information is included in our press release issued today. This call is the property of SuRo Capital, and the unauthorized reproduction of this call in any form is strictly prohibited. I would also like to call your attention to customary disclosures in today’s earnings press release regarding forward-looking information. Statements made in today’s conference call and webcast may constitute forward-looking statements, which relate to future events or our future performance or financial condition. These statements are not guarantees of our future performance or future financial condition or results and involve a number of risks, estimates, and uncertainties, including the impact of COVID-19 and any market volatility that may be detrimental to our business, our portfolio companies, our industry, and the global economy. This could cause actual results to differ materially from the plans, intentions, and expectations reflected in or suggested by the forward-looking statements. Actual results may differ materially from those in the forward-looking statements due to various factors, including but not limited to those described from time to time in the company’s filings with the SEC. Management does not undertake to update such forward-looking statements unless required to do so by law. To obtain copies of SuRo Capital’s latest SEC filings, please visit our website at www.surocap.com or the SEC’s website at sec.gov. Now I would like to turn the call over to Mark Klein.

Thank you, Claire. We are pleased to share the results of SuRo Capital’s fourth quarter of 2020. These are obviously unprecedented times we’re living through, and society is facing tremendous challenges. We at SuRo Capital continue to thank the frontline workers and responders, who have put themselves at risk throughout the COVID-19 pandemic. As the country continues to get vaccinated, we are hopeful that we are nearing the end of the pandemic. I would like to begin by discussing how our portfolio is faring during the COVID-19 pandemic and highlight how a few of our larger positions have even experienced degrees of business acceleration during these uncertain times. To conclude, I’ll hand the call over to Allison Green for a brief financial overview. At the conclusion of our remarks, we will open the call for questions. Let’s start with Slide 3. This quarter, SuRo Capital reported its dividend adjusted net asset value per share since September of 2015. At December 31, 2020, the net asset value was $15.14 per share, inclusive of dividends paid during the quarter of $0.47. This is an increase from $12.46 per share at September 30, 2020 and an increase from $11.38 per share at December 31, 2019. The net asset value totaled $302 million at quarter’s end compared to $253 million in the third quarter. Consistent with our ethos to be shareholder-friendly, SuRo Capital’s Board of Directors evaluates our portfolio on an ongoing basis to determine dividends. As such, on March 13, the Board declared a $0.25 per share dividend to shareholders. This follows our recent past dividends of $0.25 per share declared on January 26, $0.22 per share declared on December 16, and $0.25 on October 28. Please turn to Slides 4 and 5 for a review of notable developments in our investment portfolio in the fourth quarter and subject to year-end. SuRo Capital’s top five positions as of December 31 were Palantir, Coursera, Course Hero, Nextdoor, and Ozy Media. These positions accounted for approximately 73% of the investment portfolio at fair value. As of December 31, our top 10 positions accounted for approximately 89% of the portfolio. Now I’d like to discuss notable developments in a few of our largest positions. First, I want to highlight our investment in Palantir, our largest position. On September 30, Palantir executed a direct listing and began trading on the New York Stock Exchange. Consistent with Palantir’s lock-up agreement, 20% of SuRo Capital shares were freely tradable upon the execution of Palantir’s direct listing. As previously announced, between late September and early October, we sold our entire unrestricted portion of our Palantir shares. The lock-up on our remaining restricted shares expired on February 18. Consistent with our view of monetizing our public securities, we sold our remaining position in Palantir at a volume-weighted price of $26.72 for net proceeds of approximately $123 million and for a realized gain of approximately $111 million. This represents an increase to our year-end dilation of approximately $29 million or approximately $1.42 per share increase to our net asset value. Our shares of Palantir in aggregate have generated $135 million in net proceeds and realized gains of approximately $119 million. We are pleased to have delivered this positive outcome for our shareholders. Next, I would like to note that our investments in online learning through our positions in Coursera and Course Hero represent approximately one-third of our investment portfolio. From recent media reports, as well as earnings reports from public online learning companies, it is evident that the initial spike in online learning generated by the COVID-19 pandemic has continued into this full year. We continue to believe the effects of the pandemic have accelerated a long-term structural change in how education is being and will be consumed, with a clear transition towards online learning. On March 5, Coursera, our second-largest position as of year-end, publicly filed its Form S-1 registration statement. As noted in Coursera’s perspectives, Coursera generated approximately $294 million of revenues in 2020, a 59% increase over 2019. As of December 31, more than 77 million learners had registered on Coursera to learn from more than 200 leading universities and industry partners and thousands of offerings. Additionally, as of December 31, over 2,000 enterprises, including over 25% of Fortune 500 companies, were paying customers of Coursera for business. Finally, in addition to consumers and enterprises, over 100 government agencies and organizations were paying customers of Coursera’s program. We’re excited for this next step in Coursera’s journey, which marks significant progress since our initial investment in 2013. Previously, on July 17, Coursera announced that it raised $130 million in Series F financing. The round was led by NEA, Kleiner Perkins, Seek Group, and Learn Capital. We participated with our $2.8 million pro-rata follow-on investment. The information in an online publication reported around value to Coursera at approximately $2.5 billion. At year-end, our valuation of Coursera position, according to our heuristics, was driven by that financing round. As reported in an August 2020 TechCrunch article, Course Hero, our third-largest position, raised a new $70 million tranche of Series B capital at a $1.1 billion pre-money valuation. This round brings the total primary capital raising of Course Hero’s Series B to $80 million. According to an EdSurge report, this financing included investments from TPG, Goldman Sachs, and others. The report also indicates that Course Hero has over 1 million subscribers who each pay between $10 and $40 per month and surpassed $100 million in revenue last year. EdSurge previously reported in February that Course Hero had raised $10 million in their initial Series B round led by New View Capital at a $1.1 billion pre-money valuation. Due to the impact of the COVID-19 pandemic and related quarantines in school and college closures, with less in-person student access to teachers or study groups, students have increasingly turned to online learning supplements for their studies, including Course Hero’s online document library. Chegg, a key competitor of Course Hero, noted in its February earnings call that COVID-19 has meaningfully accelerated its business. In 2020, Chegg saw a 67% annual subscriber growth and total revenue growth of 57%. We believe Course Hero has been capitalizing on the same long-term trend towards online learning. Additionally, in October 2020, TechCrunch reported that Course Hero had acquired Symbolab, a provider of an artificial intelligence-powered calculator for students to solve complex math problems. The acquisition aims to further expand Course Hero's set of offerings to students. Nextdoor, our fourth-largest position, is an outstanding platform that serves over 270,000 neighborhoods across 11 countries and is used by one in four households in the United States. According to a February 2021 Wall Street Journal article, demand for Nextdoor has accelerated during the pandemic. Sarah Friar, Nextdoor CEO, noted that Nextdoor has seen daily active users increased by 50% in 2020. She continued to say local has never mattered more during the pandemic with neighbors turning to Nextdoor for help navigating school closures, making vaccine appointments, and handling the stresses of lockdown and stay-at-home orders. As a result, we believe Nextdoor has tremendous upside to continue to monetize its user base in the $161 billion United States local advertising market. Reaching global audiences through digital advertising channels has become one of the most important mobile marketing trends. We believe Nextdoor has reached a critical mass of users that is highly valuable to advertisers. Please turn to Slide 6. Segmented by six general investment themes, the top allocation of our investment portfolio is education technology, representing approximately 35% of the investment portfolio at fair value. Big data and cloud with the second largest category accounts for approximately 34% of the portfolio. Our marketplaces accounted for approximately 12% of our investment portfolio, our financial technology and services category accounted for approximately 9%, and our social and mobile category accounted for approximately 8% of our portfolio at fair value. Please turn to Slide 7. As previously discussed, we have broadened our focus beyond our core equity strategy into private credit and into pre-SPAC merger pipes. Since we first started the company, we believed in democratizing access to asset classes and specific investments generally unavailable to the public. For the last few quarters, we have highlighted the SPAC asset class as growing by a record amount. Last year, there were approximately $81.5 billion of SPAC issuance, an increase from just $13 billion in 2019. According to SPAC Research, over $74.5 billion have already been raised in 2021 to 232 IPOs; there were 248 SPAC stock IPOs in all of last year. According to Goldman Sachs, 43 SPAC deals have already been announced in the first two months of this year. Cowen Research notes that 14 deals have closed through the same period. Last year, 90 deals were announced, 55 of which closed. This would represent an increase of 37 announced in 2019 and 25 closing during the same year. We have begun to see the impact of this trend in our existing portfolio. On February 11, Rover, the SuRo Capital portfolio company, announced its plans to merge with Nebula Caravel Acquisition Corp., a SPAC sponsored by True Wind Capital. Upon the successful closing of the transaction, the combined entity will trade on the NASDAQ. The transaction values the combined company at an enterprise value of $1.35 billion and is expected to provide $325 million in gross cash proceeds to the company. This transaction, which includes a $50 million PIPE, values Rover at an enterprise value that is over three times greater than our year-end valuation. We’re excited about this potential transaction for Rover, which we believe has emerged as a leading online marketplace for pet care. Beyond our existing SPAC portfolio, we believe we can offer ongoing proprietary access to the SPAC asset class. While investors have the ability to buy SPAC common shares and warrants in the open market, most investors have no access to the other parts of the SPAC structure, such as founders equity, founders warrants, purchase agreements, and PIPEs. As broadly reported, founders equity or warrants are viewed to be valuable, and for the most part, only SPAC sponsors will have the opportunity to benefit from them. Additionally, as we have previously stated, we equate the PIPE issuance in SPAC business combinations as similar to pre-IPO investments. According to SPAC research, 494 SPACs are currently looking for companies to effectuate business combinations. This translates into potentially hundreds of opportunities over the next couple of years. In an effort to be a leader in this democratization, we continue to have ongoing dialogue with sponsors and investment banks to expand our participation beyond PIPEs to include founders equity and founders warrants. As a result, we are excited to provide shareholders proprietary access that we believe no other public vehicle presently provides. To this end, we are excited to announce two investments in founder economics. One is a $200,000 investment in Churchill Capital VI Sponsor Company. The second is a $300,000 investment in Churchill Capital VII Sponsored Company. Please turn to Slide 8. Churchill Capital VI and Churchill Capital VII are special purpose acquisition companies within the Churchill Capital. Churchill Capital has enjoyed success since its inception, beginning with Churchill Capital I’s merger with Clarivate and most recently the announcement of an anticipated merger between Lucid Motors and Churchill Capital IV. Churchill Capital VI is focused primarily on high-growth technology names and is led by operating partners Sam Altman, formerly the President of Y Combinator. Churchill Capital VII is focused on larger global opportunities. By investing in the founder economics of both Churchill Capital VI and Churchill Capital VII, we would expect a meaningful return upon the successful completion of a merger in each of the SPAC. We are having ongoing dialogue with Churchill Capital not only to continue but also to expand our relationship. Additionally, we are in discussions with other sponsor teams to participate in their sponsored economics. To reiterate, the SPAC market opportunity is broadly exciting. Furthermore, it is our opinion that we are extremely well-positioned to take advantage of this market opportunity, and we believe we can deliver value to our shareholders through this proprietary access. Beyond the facts, we continue to see a high volume of attractive opportunities across our core equity strategy. A few industries of focus include e-commerce, retail, financial technology, food technology, and transportation and logistics. As such, we’re excited to announce a $7 million equity investment in Shogun Enterprises. Please turn to Slide 9. Shogun, also known as Hearth, is a software platform that helps professional contractors grow their businesses and makes it easier for homeowners to finance home improvement projects. The company’s technology is currently focused on distributing unsecured consumer debt to homeowners in non-discretionary home repairs, including HVAC and roofing repairs, which have historically been financed through credit card debt. By the nature of contractors working away from a desk and computer screen, we believe contractors have long been underserved by technology and software that can make their business more efficient and provide a better experience for their customers. We were impressed by Shogun’s differentiated product offering and its ability to rapidly penetrate this large and unsaturated market. We believe Shogun has significant upside potential in its existing contractor vertical as it broadens its product offerings, including by adding payments and insurance products. Additionally, we believe there is a large opportunity for Shogun to expand into other verticals where consumers face large and unexpected non-discretionary expenses. Looking ahead, we’re excited about the Coursera IPO. We believe that our portfolio remains well positioned to drive long-term value. Thank you for your attention. And with that, I’ll hand it over to Allison.

Thank you, Mark. I would like to follow Mark’s update with a more detailed review of our fourth quarter activity and financial results as of December 31. First, I will review our investment activity. New investments during the fourth quarter included a $10 million investment in a Series A and Series B preferred shares of Blink Health and the $4.5 million investment in Second Avenue, comprised of $1.5 million in Series A preferred shares and $3 million in a secured term loan to Second Avenue. During the fourth quarter, we also completed follow-on investments of $500,000 in a convertible note to the current portfolio company Enjoy Technology and a total of $1 million in additional investment in the common stock of Green Acreage Real Estate Corp. Subsequent to year-end, we invested $7 million in the Series B-1 and Series B-2 preferred shares of Shogun Enterprises, $200,000 in share units and warrant units of Churchill Sponsor VI LLC, the sponsor vehicle for Churchill Capital VI, and $300,000 in share units and warrant units of Churchill Sponsor VII LLC, the sponsor vehicle for Churchill Capital VII. During Q1, we also made an additional investment of $500,000 in the common stock of Green Acreage Real Estate Corp. During the fourth quarter, we continued to sell our unrestricted publicly traded Class A common shares of Palantir. On September 30, 2020, Palantir Technologies Inc. completed its IPO on the New York Stock Exchange under the ticker PLTR. Upon IPO, 80% of our shares remained restricted until the lock-up period expired on February 18, 2021. On the date of IPO, we sold 400,000 shares or approximately 7% of our Palantir holdings going into the IPO for a net realized gain of approximately $3 million. During the fourth quarter, we sold the remaining 754,738 shares of our then unrestricted shares for a net realized gain of approximately $5.4 million. Subsequent to year-end and once the remaining 80% of our shares became unrestricted on February 18, 2021, we sold 4,618,952 or all remaining shares as of March 4, 2021 for a net realized gain of $110.5 million. In total, we have realized approximately $118.9 million in net gain from our Palantir investment, not including sales made in prior years. During the fourth quarter, we also received proceeds related to our June 2020 investment in the Palantir Lending Trust SPV. As of year-end, $8.7 million has been received from Palantir Lending Trust SPV of the proceeds received prior to year-end, $6.9 million we paid to retire the total outstanding principal of the note, $800,000 attributed to the guaranteed interest, and $1 million generated by the equity participation in the underlying collateral. As of December 31, 2020, the balance of the loan and all guaranteed interest has been fully repaid. Subsequent to year-end, we received an additional $1.4 million from the Palantir Lending Trust SPV. These additional proceeds are attributed directly to the equity participation in the underlying collateral. As of March 10, 2020, $10.1 million has been received from the Palantir Lending Trust SPV and 812,290 shares of underlying collateral, which we retain in equity interest remains to be sold. We are pleased to report that we ended the fourth quarter and fiscal year 2020 with an NAV per share of $15.14. A breakdown of NAV per share as of year-end is shown on Slide 11, and it’s consistent with our financial reporting. In sum, the increase in NAV per share during the fourth quarter was largely driven by approximately $2.92 per share of net unrealized appreciation of our investment portfolio, approximately $0.36 per share attributable to the net realized gain on the sale of portfolio investments, and approximately $0.08 per share attributable to the repurchase of our common stock. These increases to NAV per share were partially offset by $0.47 per share in dividends declared during the quarter and a $0.21 per share decrease attributable to net investment loss. During the fourth quarter, SuRo Capital declared two dividends for a total of $0.47 per share in dividends. On October 28, 2020, our Board of Directors declared a $0.25 per share dividend paid on November 30, 2020, to shareholders of record on November 10, 2020. On December 16, 2020, our Board of Directors declared a $0.22 per share dividend paid on January 15, 2021, to shareholders of record on December 30, 2020. The dividends declared have been categorized as net long-term capital gains for tax purposes. The related realized gains are attributable to the monetization upon the sale or exit of the investments in our portfolio. Subsequent to year-end, on January 26, our Board of Directors declared a dividend of $0.25 per share, paid on February 19 to shareholders of record on February 5. As Mark announced, on March 8, our Board of Directors declared a dividend of $0.25 per share payable on April 15 to shareholders of record on March 30. These 2021 dividends are expected to be categorized as net long-term capital gains for tax purposes. The related realized gains are attributable to the monetization upon the sale of assets from the investments in our portfolio. On February 19, 2021, we caused notices of redemption to be issued to the holders of our 4.75% convertible senior notes due 2023 regarding the exercise of our option to redeem in whole the issued and outstanding 4.75% convertible senior notes due 2023, pursuant to the Indenture, dated as of March 28, 2018, between us and U.S. Bank, as trustee, and the First Supplemental Indenture, dated as of March 28, 2018, between us and U.S. Bank, as trustee. We will redeem up to $38,215,000 in aggregate principal amount of the issued and outstanding 4.75% convertible senior notes due 2023 on March 29, 2021, the Redemption Date. The 4.75% convertible senior notes due 2023 will be redeemed at 100% of their principal amount at $1,000 per note, plus the accrued and unpaid interest thereon from September 30, 2020, through but excluding the Redemption Date. Holders of the 4.75% convertible senior notes due 2023 may surrender such notes for conversion into shares of SuRo Capital common stock in lieu of receiving cash at any time prior to the close of business on the business day immediately preceding the Redemption Date. The current conversion rate for the 4.75% convertible senior notes due 2023 is 108.0505 shares of SuRo Capital common stock for each $1,000 principal amount of such notes, which represents a current conversion price of approximately $9.25 per share. A copy of the notice of redemption was included as an exhibit to the current report on Form 8-K filed with the SEC on February 19, 2021. Please refer to that current report on Form 8-K for additional information. Finally, I would like to review SuRo Capital’s current liquidity. We ended the quarter with approximately $140.4 million of liquid assets, including $45.8 million of cash and $94.6 million of public security subject to lock-up restrictions at that time. Our cash balance of $45.8 million as of December 31, 2020, consisted primarily of proceeds generated during the third quarter 2020 via the ACM offering and the monetization of various portfolio positions throughout the year. The $94.6 million of public security subject to lock-up restrictions held as of December 31 represent our shares in Palantir Technologies valued at the December 31, 2020 closing price of $23.55 plus a discount for lack of marketability related to the then current lockup provision. As noted earlier, beginning with the expiration of the lock-up on February 18, 2021, and through March 4, 2021, we sold all of our remaining previously restricted shares for approximately $123.4 million in net proceeds, realizing approximately $110.5 million in gains. That concludes my comments. We would like to thank you for your interest in support of SuRo Capital. Now I will turn the call over to the operator to start the Q&A session.

Thank you. Our first question will come from Kevin Fultz with JMP Securities.

Good evening, and thank you for taking my questions. Firstly, the private credit strategy was launched just over a year ago, and in that timeframe, you’ve made a few investments. I know it’s still early on growing that part of the business, but can you give us a sense of how you view the long-term opportunity of the private credit strategy in relation to the total portfolio?

Sure. And thank you for your question. As we discussed, I guess when we first launched it, our intent was to allocate up to 20% of our portfolio to this strategy and to review the strategy. The strategy is basically an asset-based lending strategy to emerging venture-backed companies that would carry any significant coupon and have equity participation. We’ve done a couple of those investments. We are actively in discussions with several others. We believe that the opportunity set is as big now as when we initially launched it and we will continue to do our due diligence on multiple opportunities that we have. I expect that over the next period of time, we’ll be able to communicate that we’ve made other investments in that capacity.

Our next question comes from Jon Hickman with Ladenburg and Thalmann.

Hi Mark. Thanks for taking my questions. I’m not that familiar with the founder side of this SPAC world. But the investments that you made in those two backs seem relatively small compared to what you usually do. Can you elaborate on that?

Sure. And without devolving into a very long conversation about SPAC founder equity, SPAC sponsors are required to put up probably about 3% or 4% of the capital that is raised for their SPACs. In return, they’re given what amounts to a 20% fully diluted share of the capital raised plus warrants in those securities. So the basic relationship is for every dollar that a sponsor puts up, there’s a multiple of value created in the sponsor shares and warrants, and that multiple can range anywhere from seven or eight times to something in excess of 10 times. There’s a reason why there are about 500 SPACs looking for transactions because the economics are very exciting for the sponsors. We believe we have the ability, with not just Churchill, but others to help participate in the funding of that founder capital for sponsors and then to be able to get the requisite economics that provide significant multiples of our initial capital. Those two investments are obviously relatively small given the size of our capital base, but as you can imagine, these economics are quite dear to sponsors. Therefore, each opportunity we have will differ in size, scope, and who the sponsor is, as well as the potential upside opportunity.

And our next question comes from Lance Gard with One Senior Island Capital.

Yes. My question is about the dilutive effect of the convertible debentures. I would assume that it’s not included in the $15.14 NAV as of 12/31/20, but it will be taken into account during the March 31 quarter. Am I correct?

Yes, you’re correct. And Allison will give you a brief overview of the potential dilution.

Right. Thank you, Mark. So essentially, when we issued the redemption notice, we had approximately $38.2 million of principal currently outstanding. Since we issued that redemption, we did have one conversion of a thousand notes or approximately $1 million in principal that converted at the previous conversion rate. So right now, we have about $37.2 million of principal outstanding. That could be redeemed for cash if not converted prior to the redemption date, which we anticipate will happen. Should that entire $37.2 million be requested for conversion prior to the redemption, it would equate to approximately 4 million additional shares.

And our next question comes from Alex Paris with Barrington Research.

Hey guys, thanks for taking my questions. Congratulations on a strong finish to the year. It sounds like we’ve got some things to look forward to in 2021. I have a couple of questions and I’ll try to roll it up into one long question on SPACs. Mark, you mentioned your existing SPAC portfolio. I was wondering if you could just kind of go over that, with segment you have QCX 15.7 in there. What else is in there?

I’m sorry. Let’s go ahead. And I think do your comment on question. I apologize. No, go ahead.

And then, I think this surge in SPAC IPOs could lead to opportunities like you described with Rover, opportunities for liquidity events through SuRo and to that end, would your methodology for holding public equity in Rover be the same? Would you sell it as soon as lock-ups expire? And then lastly, follow-on questions at the founders' equity, in a typical SPAC IPO, if the money is not invested in two years, do you get your money back? Is it the same thing with founders?

Super. So let me do – I think I got all the questions. I tried to write it down. So thank you. Obviously, the fact that there are about 490 SPACs looking for deals is a phenomenal number. Broadly, and not specific to our portfolio, pretty much anyone in that either held in a venture capital portfolio or in a private equity portfolio has been approached by multiple SPACs at this point in time, with a value of greater than $500 million or $600 million. There are every investment bank right now running sell-side processes they now call SPAC-offs in which they invite five, six, or ten SPACs to compete for the same asset. Given that backdrop, obviously, our portfolio will be attractive, at least some of the names in our portfolio will attract the SPAC community, which is great for our shareholders. That’s number one. Secondly, our view is not going to change. We’re not in the public securities holding business. If people want to buy and sell public equities, we think they can do it on their own. So, in the case of Rover, once that SPAC deal is consummated—and whatever the lock-up period associated with that—we would treat that as if it were a traditional IPO. I think that answers the broader questions. Specifically to founder economics, the good news and the bad news for founders: they post some amount of money, and if they effectuate a business combination, they gain a multiple of that amount of money that is rewarded. However, if, after two years, they are unable to source a business combination, their founder’s equity is worth nothing. Thus, it is not a riskless trade for anyone, either founders or in our case, if we decide to participate with founders. That’s why, as we go about this process, we will clearly evaluate not only the economic opportunity presented to us, but who is presenting it and what we feel their likelihood is of identifying, sourcing, and completing a business combination with a company that can and should be public.

Next will be Lee Alper with Hammock Investors.

Hi. I think you answered the question, but just let me make it a little clearer. So if a company goes public, you will sell as soon as you can, as opposed to strategically selling?

What we’ve said, Lee, over the last probably 18 months or so, is we don’t believe that our investors are paying us to hold public securities. With that said, we’re not long-term holders of our private companies that go public. Once they go public, we will try to be intelligent and judicious about our monetization, doing it over a period of time unless an opportunity presents itself to accelerate that. So we’re not long-term holders after something goes public typically, but we aim to be strategic about how we execute our exit.

And our next question will come from indiscernible.

Hi, Mark and Allison, thanks for taking my quick call. Quick question in regards to – I think you’ve already covered it Mark, but $1.40 from the Palantir proceeds that is in addition to the year-end NAV, correct, the $15.16 at year-end?

Yes. That’s correct.

Okay. Great. And secondly...

That’ll be included in our Q1 report.

Exactly. Okay. And secondly, with the upcoming dilution, possibly with the converts, has there been any ongoing chat of increasing buybacks with the stock trading below NAV as opposed to continuously increasing the dividends quarter-to-quarter?

Well, a couple of things. As you probably know, we have been active in buying back our shares when there’s a significant discount to NAV. Up until recently, before we pre-released our numbers, our stock had been trading at a premium to NAV. The stock has come down a little due to the volatility of the market and the uncertainty of what we did with our Palantir shares. This is sort of the first time that the market has seen what we’ve done with our Palantir shares. So the market will have an opportunity to digest that however it sees fit. Additionally, the Coursera going public announcement was on Monday, I think—or last Friday. I don’t know if that’s fully understood by the public. We have been clear with our investors that we’ve been active in repurchasing shares when appropriate to enhance shareholder value. We’ve also tried to communicate dividends to our investors to return that capital in that manner. As a REIT, we must distribute gains, and we will continue to do that as well.

As a reminder, we’ll go ahead and turn the conference back over to you. That concludes the question-and-answer session.

Thank you. Thank you for taking the time to participate in the call. In our minds, we are very fortunate that our portfolio has been very much appreciated by the marketplace. The monetization and the gain in Palantir was a tremendous return for our investors. We are excited about the filing of Coursera and where that may take that position, which is now our largest position in our portfolio. We also are excited about some of the names that we mentioned and some that we didn’t have time to mention. We firmly believe that the democratization of access to SPACs is something that we can provide that is different from the ETFs that are out there or individuals simply purchasing the SPAC shares or SPAC warrants. We are really excited about that opportunity for our investors. We believe that it is untapped in the marketplace and that we can drive returns if we move against that strategy in a thoughtful manner. We truly appreciate all the time and your support, and thank you very much. I hope everybody stays healthy. Thank you very much. Bye.

Thank you. That does conclude today’s conference. We do thank you for your participation. Have an excellent day.