Groupon Inc (GRPN), Zynga Inc (ZNGA): How to Invest In Twitter and Dropbox, Here

The track record of GSV is relatively poor with investments like Groupon Inc (NASDAQ:GRPN) and Zynga Inc (NASDAQ:ZNGA) not doing well. Groupon is the provider of online coupons and Zynga designs online games. Both companies have struggled with turning the businesses into profitable endeavors. Groupon lost $67 million in the last twelve months and Zynga lost 209 million. Zynga Inc (NASDAQ:ZNGA) is down a whopping 75% in the past year and Groupon Inc (NASDAQ:GRPN), not doing quite as poorly, is down 61%. GSV Capital also holds Top Hat and Serious Energy which are believed to have no value and a $4.8 million looming hit to NAV.

Violin Memory IPO Could Help

All Things Digital reported in February Violin Memory is preparing for a 1H13 IPO. GSV holds a $14.8 million position which was acquired at a lower valuation than the projected $1.5 – $2.0 billion forecasted IPO range. In addition, Dropbox and Avenues of the World are all growing quickly and may have positive outlooks.

Conclusion

While certain holdings are moving in the right direction and GSV Capital Corp (NASDAQ: GSVC) may monetize some gains from them, primarily Violin Memory, investing in GSV requires buying into its other core holdings. Learn how to find arbitrage situations on funds like this. If you believe the value of core holdings like Dropbox and Twitter will rise, than GSV could outperform.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.