The shares of GSV Capital trade at a discount to net asset value due to the high management fees and view that its investments in private firms are worth less than the fair value stated in GSV Capital Corp (NASDAQ: GSVC) financials. In addition, there is some additional discount applied to the value of its investments due to the more illiquid nature of private holdings. That said, trends so far in 2013 are more positive for IPOs. Year-to-date, 38% of IPOs priced above their initially stated range an increase from levels in recent years.
GSV has 47 holdings in its portfolio as of the end of 2012 and its top ten make up 60% of net asset value (NAV). Its largest holdings as a percentage of (NAV) are Twitter at 14.3%, Palantir Technologies at 8.3%, Violin Memory at 5.8%, Dropbox at 5.7% and Chegg at 5.6%. Facebook makes up 3.7% of NAV. As of the last report at year-end, GSV has a NAV of $13.07 per share, $252.6 million, a 3% decline from 3Q12. The decline resulted from a slight negative impact from Silver Spring Networks, discussed below, and total write off of Top Hat. The current market price of GSVC is 37% below NAV. Positively, management estimated that revenues of its holdings increased by 80% in 2012 and most of its top ten holdings had increases of 100%.
Poor Track Record
While management noted revenues of its portfolio companies moving in the right direction in 2012, that does not mean profitability is doing the same.