Tumbling share prices of Facebook Inc (NASDAQ:FB) and Zynga Inc (NASDAQ:ZNGA) have negatively affected the third quarter performance of GSV Capital Corp (NASDAQ:GSVC), says Edward Woo, an analyst at Ascendiant Capital Markets. Facebook Inc (NASDAQ:FB) and Zynga Inc (NASDAQ:ZNGA) both have seen more than 30 percent decline in their share prices since the end of the second quarter.
GSV Capital Corp (NASDAQ:GSVC) is a Woodside, California-based closed-end investment firm that invests especially in privately-held high growth technology companies. Its net asset value decreased to $13.45 per share from $13.81 in the second quarter. Net investment income stood at $0.12 per share, and net change in unrealized depreciation was $0.24 per share.
During the third quarter, GSV invested in nine existing and nine new portfolio companies. At the end of September 2012, it had made a total investment of $217 million. In the fourth quarter, the firm has invested $4 million in four existing portfolio companies so far. Thus, GSV Capital has a portfolio of 46 companies. And it has $37 million in investable cash, which is approximately 14 percent of the total assets.
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
GSV is currently trading at $7.63, about 43 percent below the net asset value per share. Though some of GSV’s peers have seen their stock prices tumbling as much as 65 percent, there are many others that are trading at 50 percent above their NAV.
However, the current market trends look promising. Many privately-held technology companies have demonstrated strong valuations from M&A activities and IPOs. Technology IPOs have given 19 percent YTD returns, compared to 11 percent YTD gains for S&P 500.
Edward Woo expects that several companies in GSV’s portfolio may launch IPOs in the next six to nine months. Despite the recent decline in GSV’s share prices, Ascendiant Capital remains positive on the firm’s long-term share price appreciation. Ascendiant maintains its buy rating for GSV, but has lowered the 12-month price target from $14 to $10 per share.
GSV Capital Corp (NASDAQ:GSVC) has investments in some of the most popular tech firms, like Twitter, DropBox, Facebook Inc (NASDAQ:FB), Zynga Inc (NASDAQ:ZNGA), Groupon Inc (NASDAQ:GRPN), SugarCRM, and Zoom Systems.