Why SuRo Capital Shares Are Trading Higher And Could Be A Palantir Play

Investment fund SuRo Capital Corp SSSS reported third-quarter earnings, growing its net asset value. The company also highlighted its investment in Palantir Technologies Inc PLTR, which recently completed its direct listing.

Q3 Earnings: SuRo Capital, which owns stakes in venture-backed private companies, reported third-quarter net asset value of $12.46.

Net asset value increased from $11.84 in the prior quarter and $11.24 in the comparable period from the last fiscal year.

The net asset value is also significantly higher than the current share price of the company.

The company held stakes in 24 companies valued at $215.4 million at the end of the quarter.

Related Link: Sutter Rock Capital Could Be Big Winner From Palantir IPO

Palantir Stake: For years, SuRo Capital has held a stake in Palantir that was among its top five holdings.

The direct listing of Palantir has created an open market for shares and a chance for SuRo Capital to monetize its investment.

In the third quarter, Palantir reported a $46.7 million value on its Palantir shares. The cost basis on the shares was listed as $15.1 million.

The company sold 400,000 shares of Palantir in the third quarter for a gain of $3 million. Since the third quarter, SuRo Capital sold 754,738 shares of Palantir at $10.04 for a gain of $5.4 million.

The company still holds 4,618,952 shares of Palantir, which at today’s price are valued at $65 million. The increased value of Palantir since its listing could move SuRo Capital shares higher.

Other Portfolio Companies: Coursera is the largest holding in the portfolio, valued at $52.7 million and representing 25% of the portfolio.

Coursera completed a financing round, which SuRo participated in, valuing the company at $2.5 billion.

Course Hero, the third-largest stake in the company, completed a $1.1 billion valued financing round in August.

The company's stake in Nextdoor, which is considering a $5 billion IPO, is valued at $10.6 million.

SuRo made a new $10 million investment in Blink Health since the third quarter. The company is working on lowering the drug costs for consumers, similar to GoodRx Holdings GDRX.

Price Action: Shares of SuRo Capital are up 9% to $9.87 on Friday. Palantir shares are up 18% to $14.07.