SuRo Capital Corp (SSSS) 2020 Q4 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to SuRo Capital's Fourth Quarter and Fiscal Year 2020 Earnings Call. (Operator Instructions) 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 that corresponds to today's prepared remarks by management is available on our website at www.surocap.com, under Investor Relations, Events & 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 a 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 the COVID-19 pandemic and any market volatility that may be detrimental to our business, our portfolio of 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. Actual results may differ materially from those in the forward-looking statements as a result of a number of 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 obtain 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 2020. These are obviously unprecedented times we are living through, and society is facing tremendous challenges. We, at SuRo capital, continue to thank the front line workers and responders, who will put themselves at risk throughout the COVID-19 pandemic. As the country is continuing to get vaccinated, we are hopeful that we are nearing the end of the pandemic. I would like to begin by discussing how our portfolios fared 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 will 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 highest dividend-adjusted net asset value per share since September of 2015. At December 31, 2020, 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. 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 declared 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 5 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 would 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's 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 Palantir -- 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. We sold these remaining shares at a volume-weighted price of $26.72 for net proceeds of approximately $123 million, and for a net -- for a realized gain of approximately $111 million. This represents an increase to our year-end valuation 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 net -- 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 margin through our positions in Coursera and Course Hero represent approximately 1/3 of our investment portfolio. From recent media reports as well as earning 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 the school 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 prospectus, Coursera generated approximately $294 million of revenues in 2020, a 59% increase from 2019. As of December 31, more than 77 million learners have 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 offering for governments. 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 it raised $130 million in Series F financing. The round was led by NEA, Kleiner Perkins, SEEK Group, Learn Capital. We participated with our $2.8 million pro rata follow-on investment. The information in online publication reported a round value to Coursera at approximately $2.5 billion. At year-end, our valuation -- our Coursera position, according to our heuristics, was driven by that financing round.

As reported in 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 raised in 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 that Course Hero surpassed $100 million in revenue last year. EdSurge previously reported in February that Course Hero have raised $10 million in their initial Series B round, led by NewView Capital at a $1.1 billion pre-money valuation.

Due to the impact of the COVID-19 pandemic and related quarantines and school 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 of 2020, TechCrunch reported that Course Hero had acquired Symbolab, a provider of artificial intelligence power 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 1 in 4 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's CEO, noted that Nextdoor has seen daily active users increase by 50% in 2020.

She continued to say, local has never mattered more. That in the pandemic with neighbor turning to Nextdoor for help navigating school closures, making vaccine appointments and handling the stresses of long time -- 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. As reaching local 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 6 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 & Cloud was the second largest category, representing approximately 34% of the portfolio. Our Marketplaces accounted for approximately 12% of our investment portfolio. Our Financial Technology & Services category accounted for approximately 9% and our Social & 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 believe 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 was 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 IPOs in all of last year. According to Goldman Sachs, 43 SPAC deals have already been announced in the first 2 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 had closed. This represented an increase of 37 announced in 2019, with 25 closings during the same year.

We have begun to see the impact of this trend in our existing portfolio. On February 11, Rover, a SuRo Capital's 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 expected to provide $325 million in gross cash proceeds to the company. This transaction, which includes a $50 million pipe, values were Rover at an enterprise value that is over 3x greater than our year-end valuation. We are excited by 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, forward purchase agreements and PIPEs. As broadly reported, founders equity and warrants are viewed to be valuable, and for the most part, only SPAC sponsors have had 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 PIPE 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 2 investments in founder economics: one is a $200,000 investment in Churchill Capital VI sponsor company; and the second is a $300,000 investment in Churchill Capital VII sponsor 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 partner, 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 believe we could expect -- we would expect a meaningful return upon the successful completion of a merger in each SPAC.

We are having ongoing dialogue with Churchill Capital to not only to continue but also to expand our relationship. Additionally, we are in discussions with other sponsorship teams to participate in their sponsor economics. To reiterate, the stack 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 SPACs, we continue to see a high-volume of attractive opportunities across our core equity strategy. A few industries of focus include e-commerce and retail, financial technology, food technology and transportation and logistics. As such, we are 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, will make it easier for homeowners to finance home improvement projects. The company's technology is currently focused on distributing unsecured consumer debt to homeowners in nondiscretionary 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 in computer screen, we believe contractors have long been underserved by technology and software that can make their business more efficient and a better experience for their customers. We were impressed by Show Gun's differentiated product offering and an ability to rapidly penetrate this large an 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 in which consumers face large and unexpected nondiscretionary expenses.

Looking ahead, we are 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 will 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, Q1 2021 investment activity, recently declared dividends, the recently announced redemption of our 4.75% convertible senior notes due March 2023 and our current liquidity position. First, I will review our investment activity.

New investments during the fourth quarter included the $10 million investment in the Series A and Series B preferred shares of Blink Health, and a $4.5 million investment in Second Avenue comprised of $1.5 million in the 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 current portfolio company Enjoy Technology and a total of $1 million in additional investment in the common stock of GreenAcreage Real Estate Corp.

Subsequent to year-end, we invested $7 million in the Series B1 and Series B2 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 invested an additional $500,000 in additional investment in the common stock of GreenAcreage Real Estate Corp.

Please turn to Slide 10. 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 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 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 the total outstanding principle of the note, $800,000 was attributed to the guaranteed interest and $1 million was generated by the equity participation and 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 Palantir Lending Trust SPV. These additional proceeds are attributed directly to the equity participation and 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, to which we retain an equity interest, remains to be sold.

We are pleased to report 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 is 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 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 2 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. And 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 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. And 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 sale or exit of 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 exercise of our option to redeem, in whole, the issued and outstanding 4.75% convertible senior notes due 2023, pursuant to the indenture stated 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, $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 securities 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 ATM offering and the monetizations of various portfolio positions throughout the year.

The $94.6 million of public securities 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 lock-up 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 and support of SuRo Capital. Now I will turn the call over to the operator for the start of the Q&A session. Operator?

(Operator Instructions) And our first question will come from Kevin Fultz with JMP Securities.

Firstly, the private credit strategy was launched just over a year ago. And in that time frame, you've made a few investments. I know it's still -- you're still early in growing that part of the business, but can you give us a sense of how you view the long-term opportunity set 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 this strategy. The strategy is basically an asset-based lending strategy to emerging venture-backed companies that would carry a significant coupon and an equity participation. We have -- as you said, we have done a couple of those investments. We are actively in discussions with several other of them. We believe that the opportunity set is as big now as when we initially launched it, and we continue to do our diligence on the multiple opportunities that we have. And I expect that over the next period of time, we'll be able to communicate that we've made other investments in that capacity.

(Operator Instructions) And our next question comes from Jon Hickman with Ladenburg Thalmann.

I'm not that familiar with the founder side of the SPAC world. But the investments that you made in those 2 SPACs seem relatively small compared to what you usually do. Can you elaborate on that?

Sure. And without devolving into a very long conversation about SPACs and SPAC founder equity, SPAC sponsors are required to put up probably about 3% or 4% of the capital that they raise -- that are raised for their SPACs. And for that, they are given what amounts to 20% fully diluted of the capital that's raised plus warrants in those securities. So the basic relationship is for every dollar that a sponsor puts up, there is a multiple of value that's created in the SPAC sponsor shares and warrants. And that multiple can range anywhere from 7x or 8x amount of money they put up, up to something in excess of 10x.

So that is -- there is a reason why there's 500 SPACs out there looking for transactions because the economics are very exciting to the sponsors. And we believe that we have the ability with, not just Churchill, with others, to help to participate in the posting of that founders' capital for sponsors and then to be able to get requisite economics that are significant multiples of our initial capital. They -- those 2 investments are obviously relatively small given the size of our capital base. But as you can imagine, these economics broadly are quite dear to sponsors. And so each opportunity that we have will be different in size, scope, who the sponsor is and what the potential upside opportunity is with them.

(Operator Instructions) And our next question comes from [Lance Gad] with [One Senior Island Capital].

Yes. My question is about the dilutive effect of the convertible debentures. I would assume that it's not 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 that this affords. And so we're level set, we said we issued this convert in 2018 at what was a 20% premium to the stock price and at a premium to our NAV. And our ability to borrow money at 4.75% and deploy that against the investments that we've had and to be able to generate that significant rate of return against that money, we think, is a more than a very strong offset. And the fact that our converts are so deep in the money is because we've been so fortunate that our portfolio of companies have performed the way they have. But Allison can try to give you a better idea of what the potential dilution will upon the conversion.

Right. Thank you, Mark. So essentially, when we issued the redemption notice, we had currently $38.2 million of principal that was currently outstanding. Since we issued that redemption, we did have 1 conversion of 1,000 notes or approximately $1 million of principal that did convert 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, which we anticipate will happen. Should that entire $37.2 million be requested to be converted prior to the redemption, that would end up in just over 4 million additional shares.

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

Congratulation on the 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 us. I know you have CCX VI and VII in there. What else is in there, part A?

So -- okay. I'm sorry, Alex, go ahead. I didn't mean to -- do your compound question, I apologize. No, go ahead.

All right. And then also, I think the 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 sell it as soon as lock-ups expire?

And then lastly, a follow-up question to the founders equity. In a typical SPAC IPO, if the money is not invested in 2 years, you get your money back. Is it the same thing with founders? That's it.

Super. So let me do -- I think I got all the questions. I tried to write it down. So thank you. Obviously, when -- the fact that there is 490-some-odd SPACs looking for deals is sort of a phenomenal number. I think broadly, and not specifically to our portfolio, pretty much any company that's either held in a venture capital portfolio or in a private equity portfolio has been -- that has a value of greater than $500 million, $600 million has been approached by multiple SPACs at this point in time.

I think there is -- there are not -- it's not that they're being just reached into by the SPACs, there are -- every investment bank right now are effectively running sell-side processes that they now call SPAC-offs, in which they invite 5, 6, 10 SPACs to compete for an asset. So given we're -- given that backdrop, obviously, our portfolio is going to be attractive. At least some of the names in our portfolio will be highly attractive to the SPAC community, which is great for our shareholders. So that's number one.

Secondly, RV is not going to change. We're not in the public securities holding business. We -- if people want to buy and sell public equities, we think that they can do it on their own. They don't need us to do that. So in the case of Rover, once that SPAC is consummated, that deal is consummated, and whatever the lock-up period associated with that, we would treat that as if it was a traditional IPO. That's -- I think that answers the broader questions.

Specifically to founder economics, the good news and the bad news for founders. The good news is, they post some amount of money, and if they effectuate a business combination, there is a multiple of that amount of money that is rewarded that they have -- that they end up with. In the event after 2 years that they are unable to source a business combination, then their founders' equity is worth nothing. So it's not a riskless trade for anybody, for founders or, in our case, if we decide to participate with founders.

That's why you do -- as we go about this process, we will clearly evaluate not just the economic opportunity that may be presented to us, but who's presenting it to us. And what we feel the likelihood that they have the ability to identify, source and complete a business combination with a company that can and should be public.

(Operator Instructions) Next will be [Lee Alper] with [Hammock Investors].

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

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 -- so we're not long-term holders of our private companies that go public once they go public. We've also said that we will not just randomly or indiscriminately sell the shares, especially in and around lock-up periods there is usually a fair amount of volatility associated with those shares, so we will try to be intelligent and judicious about our monetization and do it over a period of time unless the opportunity provides us to accelerate that. So we're not long-term holders after something goes public, typically. But we are -- we try to be somewhat judicious about how we execute our exit.

(Operator Instructions) And our next question comes from [Eric Hao] with [Skyer Capital Partners].

Quick question in regard 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 $15.15 at year-end?

Yes, that's correct.

Okay. Great. And secondly, with...

That will be included, obviously, 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 as a group, retiring our shares when there is a significant discount to NAV. Up until actually pretty recently before we pre-released our numbers, our stock had been trading at a premium to NAV. The stock has come down a little bit with the volatility of the market and the volatility and uncertainty of what we did with our Palantir shares. This is sort of the first time that the market -- we've communicated to the market what we've done with our Palantir shares. So the market will have an opportunity to digest that in whatever way it sees fit.

Additionally, as the Coursera going public announcement was Monday, I think -- last Friday. So again, I don't know that's fully understood by the public. So we are -- as those who have been investing with us for a while know that we've been active in repurchasing when repurchasing is the appropriate tool to enhance shareholder value. We've also been -- we tried to communicate dividends to our investors and return capital that way. As a RIC, we are required to distribute -- to distribute gains. So we will continue to do that as well.

(Operator Instructions) We'll go ahead and turn the conference back over to you as that does conclude the question-and-answer session.

Thank you. Thank you all of 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 are also excited about some of the names that we mentioned and some of the names that we didn't have the time to mention.

We do firmly believe that the democratization of access to SPACs is something that we can provide that is different than the ETFs that are out there or individuals simply purchasing the SPAC shares or SPAC warrants and not having the ability to participate in the sponsor economics, to participate in PIPEs, to participate in other elements. And we're really excited about that opportunity for investors. We believe that that is untapped in the marketplace, and that we can drive returns if we move against that strategy in a thoughtful manner.

So we truly appreciate all the time and all the -- and your support, and thank you very much. And 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.