Q3 2022 180 Degree Capital Corp Earnings Call
This line is now off hold.
Good morning.
Welcome to 180 degree capital Corp's third quarter 2022 financial results update call. This is.
Daniel Wolfe President and portfolio manager of 180 degree capital, Kevin <unk>, Our Chief Executive Officer, and portfolio manager and I would like to welcome you to our call. This morning. All participants are currently in a listen only mode. Following our prepared remarks, we will open our lines for questions. If you'd like to ask a question. Please type star six on your phone or click the ask a question.
And icon or if you are participating via your computer I would like to remind participants that this call is being recorded.
We will be referring to a slide deck that we have posted on our investor relations website at.
At IR Dot 100 degree capital Dot Com under financial results. Please turn to our Safe Harbor statement on slide two this presentation may contain statements of a forward looking nature related to future events statements contained in this presentation that are forward looking statements are intended to be made pursuant to the safe Harbor provisions of the <unk>.
Securities Litigation Reform Act of 1995. These forward looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect the company's current beliefs and a number of important factors could cause actual results to differ materially from those expressed herein.
Please see the Companys filings with the Securities and Exchange Commission for a more detailed discussion of the risks and uncertainties associated with the company's business that could affect the company's actual results, except as otherwise required by federal Securities laws 180, REIT Capital Corp undertakes no obligation to update or revise these forward looking statements to reflect new event.
There are uncertainties I would now like to turn the call over to Kevin. Thanks, Daniel and good morning, everyone will start on slide three where we note our NAV decline this quarter to $8.10 or 3% from Q2.
Our cash and liquid securities increase in the quarter to $67 5 million or $6 50 per share with the balance of our book value represented by our private holdings.
Our public performance return was a negative two 9% led by declines in Potbelly Comscore quantum in commercial vehicle group the largest increases in value from our public companies came from Irina group.
Right.
On the private side. The main takeaways were down to four act of companies left that as a significant decline from the 24, we inherited five years ago. While this year has been difficult to say the least the good news is we have completely transformed our business made our balance sheet transparent and easy to value and created a business that.
Actually has a future and provides strategic options to create value that simply did not exist five years ago.
On slide four we show our book value on a quarterly basis no need for me to tell you how difficult 2022 has been for micro cap companies and that is reflected in our book value.
Good news is 80% of our assets are now in our ongoing strategy and given where some of our stock prices are for the companies we own.
Hard to see a path for significant appreciation for <unk> from here.
Not a prediction for the next three minutes, but rather one that incorporates a longer term time horizon.
On slide five you see our quarterly performance.
For every quarter since we started year to date, the classic United States portfolio of 60% stocks and 40% bonds is on pace for the worst year on record.
Speaking about the last five years I'm talking about 19 O $719 3100, $19 37 in 2008.
In many year in many ways 2022 has resembled a 100 year flood.
Back to the good news on slide six this chart shows the incremental growth on the level of cash and public related assets. The bar chart is the dollar amount reflected back to per share amounts.
Our share price trades at a significant discount just to our public related assets. Danny will show you are some of the parts chart near the end of this presentation and while it's difficult to find the good in 2022. The truth is we are in a far better position to succeed than we were five years ago. When we had a bloated cost drop.
Sure a busted VC strategy, which resulted in years and years of decaying in AAV.
Despite the transformation of our balance sheet, our stock continues to trade at a significant discount to its book value today. If today's price is the right price and the price investors, replacing on our business well when it was honored way to zero. It was absolutely the wrong valuation the discount that we had when I arrived it's still the same.
Today, which is disappointing to say the least given our transformation.
Either way you have seen this management team dip until its pockets and buy stock in the open market with after tax dollars.
I suspect that won't change as long as the discount is the severe and remember it's far easier to do strategic things when our balance sheet gives you flexibility we haven't had that up until now we do today.
Slide six shows our normal sources and changes in net assets and as you can see we had a slight increase in the value of our private which was offset by normal operating expenses and <unk> 19 of losses in our public portfolio.
Year to date tells a similar position picture, although obviously the first half of the year put a big Dent in our performance. What's interesting is the drumbeat of negativity embarrassed and it couldnt be any greater than it's been since mid year recession talk inflation chatter of rising rates are tough talking fed and what's happened through our public holdings since June .
June they really have stopped going down much to do with our belief that many names or so washed out so oversold and have greatly discounted the negative environment, which by the way as it relates to a recession may or may not happen at least the one that everyone is talking about as an aside we think we're already in a recession and a different kind of a recession, but a recession nonetheless.
Slide 10 shows you the success of our strategy over the long term needless to say, we can look at the big picture and tell ourselves that the 180 shareholder has been properly served by our stock picking in the public markets I'd encourage everyone to read our shareholder letter we run a concentrated portfolio of stocks not correlated to the market that is our intentional strategy.
The world does not need another diversified small cap value fund that runs with low standard deviation. If it does that will never be us and while we are disappointed with 2022, we arent discouraged that somehow we forgot how to invest.
After all it's investing there are periods when you lose when you were out of favor when you don't get everything right. When you get things wrong remember, we have permanent capital nobody can tap on the shoulder and say time's up nobody can redeem is nobody can take our capital way in this environment that is a big aid and so helpful. When we invest in companies trading at all time lows.
We're not having to sell when we don't have to sell.
Slide six shows the performance of every stock we owned in its performance for the quarter on slides 12 through 14 give a snapshot of each and what's transpired through the quarter to some extent the fundamentals of most of our holdings did not mirror the dramatic decline in their share prices for instance, potbelly reported strong results and suggested optimism for the second half of the year.
They announced two franchise deals what happened stock declined 20% in the quarter to a price that was a third of the value from five years ago. When it was a broken story with declining comps and a completely ineffective management team that was just one example of a holding that executed its business fairly well the stock price has been severely punished in this way.
Your market the one name, we own where management truly mismatch this business and which we've talked about was <unk>.
Quantum.
Even them this quarter was okay reported okay numbers on the top line EBITDA was.
Was fairly in line certainly better than prior quarters and yet the stock declined 24%. This quarter Comscore had a fine quarter landed a new CEO what happened stock down 20% I think you can get the picture only arena group in all its equipment, where the only holdings that helped our performance this quarter.
Just been that kind of market.
On the next set of slides, we offer our performance by a stock by stock basis, I wouldn't call. It a pretty picture year to date for 2022, but I would call. It a real good indication of our skill set if you turn to slide 16 and focus on our performance since our inception.
I hope as the next few years of a lot more like this table.
Other than 2022, and if it does this year will turn out to be a mirage one that provided a great opportunity to buy a basket of Microcap microcap stock through share prices have a 100% or more upside.
On Slide 21, we show you our performance over every time frame.
You've often heard me talk about the random walk of investing and needless to say, it's been a lot of time thinking about it maybe to irritate myself, but the random walk theory suggests that changes in stock prices at the same distribution are independent of each other therefore, it assumes that the past moving or trend to the stock price or market cannot.
Be used to predict the future movements in short random walk theory for claims that stocks take a random and unpredictable path that makes all methods for predicting stock price of fuel in the long run.
That's the one part I agree with is that most market participants think the future replicate exactly today. We've all seen this movie before if I told you at the outset of the pandemic.
In March of 2020 that the market and 180 degree capital would show five straight quarters of growth that would have felt like a crazy statement at the time, but that's what happens for those experts that know exactly where the market is going to do over the next year. My guess is they spend most of their time annualizing. The current environment that we're living in.
But you know that markets change economics change and at the end of the day stock prices are a discounting mode.
Sure.
The random walk theory, infers that the past movement of or trend of a stock price or market cannot be used to predict its future movement I agree with that and it plays into our strength of being contrarian and ensuring that the price we pay for the business that we buy overly discounts the worst possible environment there.
The random walk theory believes it's impossible to outperform the market without assuming additional risk I don't even know what that means I do know that this slide shows that it's possible to outperform the market and do so in a responsible way that doesn't in core corporate massive risk taking.
The random walk theory considered fundamental analysis and dependable due to the often poor quality of information collected and its ability to be missed interpreted.
This is the part I shake my head at the most one what do you think we do all day the market is efficient today, everyone understands the fundamentals of today, but nobody knows the fundamentals of tomorrow buying a stock that offers limited risk if the current environment continues while offering great upside if the environment changes.
Is exactly what we do plus we have the added tool of activism to have a better say in the outcome of the business.
And finally, the random walk theory claims and investment advisors add little or no value to an investor's portfolio to which I laugh at there are good advisers, and there's bad and visors Theres, good Pms and there's bad Pms go find the good ones.
I'd like to think that our performance over a long term time period of prunes proven that our process. If anything has been a fun random walk.
Slide 22, finally is what I'm most proud of although you wouldn't know it from our share price performance. We have turned a business that was well on its way to zero to have a stable balance sheet a business model that has the opportunity to create significant value for our shareholder base. There's been a lot of work from Daniel and others to rid this company of the mess that was created in the <unk>.
Higher 10 years, I think give the shareholders a turn a chance to win on the one hand, I think you know my personality by now move revolves around how we're doing in our share price and this has been a tough year, but one our belief is that our share prices overly discounted itself. Unlike many of our.
Like many of our holdings and two the amount of business transformation that has occurred has been critical in setting this company up for future success with that I'll turn it over to Daniel Thanks, Kevin Please turn to slide 23.
As Kevin mentioned, we've transformed our business over the last five years away from the historical venture capital model and towards the Republican public related to securities for.
The sale of our future milestone payments from the acquisition of Petro by Eli Lilly.
Tara Biosystems of animal health and the public listing of UA system under the symbol <unk>.
In 'twenty two.
Supercharge that transformation.
All of these monetization and as you can see on this slide 100 acre is remaining private portfolio really only has one material position in that.
Yeah.
The sale of the Terra <unk> presented its about $3 million worth of value that we hold on the balance sheet in terms of future payments from milestones and also.
Contractual payments and those contractual payments represent approximately $2 6 million due to a 180 over the next one five years and we just said we currently expect to receive approximately 275000 in December of $1 million on April 23, and the remaining $1 $3 million in April of 24 <unk>.
Additionally, while not as material as those amounts we do expect to receive approximately $100000 by the end of 'twenty two.
From the partial liquidation of Magnolia Neurosciences and there'll be a small amount that comes.
In the first half of 'twenty three once the company is fully liquidated.
It just shows you that there is value on that list in there that's not just being fair value, but that's actually cash that we expect to come back to 180 over the next one five years.
With regard to the remaining legacy private portfolio as Kevin mentioned, it increased NAV by <unk> <unk> per share approximately 240000.
<unk> includes the difference in value of D wave systems from June 30 to the opening price of training.
Under Kubitz inclusive of a discount for lack of marketability the increase in value attributed to the legacy private portfolio portion.
Approximately $1 4 million or 13 share and that was offset by risks and by declines in the fair values of egg by Angel Paclitaxel and the remaining future payments from the potential payments from the acquisition of buybacks by Amgen.
Please turn to slide 24.
For Q3 dollars 22, a regular operating expenses equaled approximately 927000 versus approximately 105000, a year ago and.
In the year ago quarter. The primary sources of difference relates to higher accrual for audit fees, the timing of certain expenses related to tax preparation and public relations and Marty marketing costs as well as the addition of Matt Epstein to our team.
As has been the case since started <unk> in 2017, we have been consistent in saying this management team will only participated in a bonus pool, if our performance warrants it our performance thus far in 'twenty two dozen more anymore. Its bonus pool unnecessary no performance based bonuses accrued as of the end of this quarter. The final assessment of any bonus pool. He made.
Our board of Directors compensation Committee of our board of directors at the end of the year. Additionally, we'll be maintaining a lean cost structure.
Inside of our fixed expenses for being a public company and focus our expenses on activities solely designed to enhance our investment performance or increase our revenue from outside of managing outside capital. Please turn to slide 25.
Part of these additional expenses in 'twenty two versus 21 related to increased marketing efforts to bring <unk> to the attention of potential investors as well as identifying third party capital to manage and additionally into launching a new website earlier. This year, we have been working with peak strategies to identify opportunities for interviews articles and other outlets.
To speak about what we are doing at a 180 <unk> capital Corp.
This slide shows the list of articles podcast quotes and other marketing efforts that since we started this process in March 'twenty two.
You can find links to all of these on our website under the insights that.
We will continue to seek out similar types of opportunities in our effort to bring attention and investors to 180.
Please turn to slide 26, and 27, we provide these slides each quarter that enable our shareholders to look at the trend of our total expenses and compensation related to <unk> as a percentage of net assets.
We continue to anticipate the reductions in our operating expenses as a percentage of net assets will be based on growth in our net assets rather than further reductions in our expenses. We remain committed to treating every dollar of shareholder money with the utmost care and consideration.
As we continue to say and we will always say is much easier for us to grow NAV, where the expense Laredo rate is today rather than historically.
Please turn to slide 28 here represent our scorecard for 'twenty three if for Q2 through Q3 of 'twenty two based on certain metrics that we track throughout the year.
The first three quarters of 'twenty two are difficult. We believe we are well positioned to grow value for our shareholders across all of these metrics over time as we have done during the prior five years of 180 <unk> existence.
Please turn to slide 29, and let's get through some of the parts that Kevin mentioned earlier.
As of the end of the quarter turned traded at 68% of our securities are public and related companies cash and other assets net of liabilities were about $6 42 per share our stock price was 549, if we received a 100% credit and the value of these assets.
Net of liabilities the marketed subscribing a negative value of approximately 93 per share and $9 6 million.
Private portfolio that is negative $963 million or $9 $6 million put it other way, we would have to pay someone $9 $6 million and take our private portfolio holdings off our balance sheet.
<unk> told you earlier that for overt about close.
Close to $3 million of that is cash coming to us over the next.
One and a half years.
At the end of the day legacy private portfolio.
As currently are allowed irrelevant to our future success, given how painful the market has been to 'twenty. Two we think the current construct of our balance sheet has provided a true Florida, our stock price while none of 'twenty. Two it's been fun had 22017 to 21 not occurred our share price. We believe our share price would be nowhere, where it is training.
Today.
Yes, we certainly do not believe that our share price reflects the appropriate value of 180 and as you've seen us do in prior quarters in similar situations management looks forward to adding to their ownership of 180 in open windows for such purchases.
I'll now turn it back to Kevin for any other comments before we open for questions.
You can just open it up for questions I do.
One folks to understand that what Daniel said is true.
We've gone through the exercise of trying to monetize our private portfolio in ways that we haven't been able to share with the public because they're over the wall transactions to be over the wall to understand what we're doing in NPI stuff.
We've gone through secondary markets. We've had individuals look at certain individual holdings look at the whole portfolio.
But never in our wildest imagination.
Think that if we called up secondary.
Folk who spends their time transacting in portfolios like this the fact of the matter is we would literally hand, the portfolio over to someone and offer to pay them $10 million to take it.
What our share price represents as it relates to our book value and I am sorry, but that doesn't make any sense to me so good uptick.
Now for Q&A.
If you have a question. Please type star six on your phone or click the ask a question icon, if you're participating via computer.
Our first question comes from Adam Waldo Adam.
Hi, Good day, Kevin and Daniel Thanks for taking my questions or three areas I'd like to explore with you today.
The first being the.
Situation with AG biome.
Second being a few comments around score and then thirdly.
Wanted to talk for a few minutes about the third party capital raising environment and the addition of Matt upstream to the team.
So with respect to AG volume, obviously, just the mark at the end of the quarter just under 15% of total.
Net assets and.
Kevin you made a comment about third party options for potentially monetizing.
The private portfolio, obviously, that's basically AG bio.
You know you Timko isn't big shareholder there T Rowe price ventures fidelity ventures, and so on.
Can you comment on whether you've had any conversations about potentially selling that position.
Two one of those large institutional holders venture sides and redeploying the proceeds into your public market strategy.
So Adam Thanks for the question I think what we can do is speak generally right.
We speak to all of the investors of all of our private portfolio companies I'm.
Kevin mentioned, there's always lots of things that we're trying to do in the background that we can't go into detail on.
So I think you can assume that we have spoken with or work to speak with anyone and everyone that we think might have an interest to purchase.
Our private portfolio companies, it's a difficult.
Exercise with those entities because venture capital firms are not designed to Fi interests from other investors. They are designed to put money into directly those companies and so even if when you look historically you can even public.
Look at the <unk>.
Historical transactions and any information that's out there.
Anytime that there's usually secondary transactions, where venture where certain investors are selling their position, it's usually not those venture capital investors buying because thats just not what they do.
The way it goes is it.
If somebody wants to bag AG by them, they know where we live.
They offer us $1 million, we go down the pound salt.
If the offer is something that we think is fair value. Then we'll have a conversation we have no interest in selling something at a price that makes no sense and we don't have to.
Absolutely fair enough, Okay, Oh I'm sorry.
Yes, you can keep going.
Okay, sorry, so around El Comscore, yes.
Yes around Comscore, obviously, you guys had been publicly Actavis thereafter, having a series of private conversations with the board John Carpenter has been named the CEO .
They they bought some store versus bought some stock in the open market, obviously yesterday the contract renegotiation with charter was announced overall, what's your sense in terms of how the board is progressing with addressing a number of the governance issues that you highlighted in your public letters and how.
How are you thinking about.
About your activity going forward.
So this is emblematic of the market, sometimes you get things wrong.
And you can fundamentally blame yourself for picking the wrong stock because you got the fundamentals wrong.
One was an example of that it's all on us.
Louis they blow it and stock deserve to be now.
We were very disappointed in the Comscore board and how they are conducting themselves earlier in the year to the point, where we wrote our two letters.
Since that time, what have they done.
They have a new CEO , one who is focused on profitable growth.
Who is right, we're making the management team.
One who has very little interest in <unk>.
Pontificating about the industry, but rather one that's interested in having double digit I should say, 15% to 20% EBITDA margins, they're attending today higher than 10 actually.
Close to 10.
The service, we told them that you were not acting in the best interest of common shareholders only yourselves.
Service went into the open market bought $1 million worth of stock for $2 I think hitting 24 something like that.
They not only did they replace the CEO , but they replace the chairman of the board.
With a gentleman from Cerberus appointed service.
Board member, who used to run Mcgraw Hill.
A number of conversations with him.
He needs a effective chairman of the board.
And in a breath of fresh air compared to what we were listening to before they.
Asked them, specifically about that charter deal.
And basically wanted to answers as it related to what kind of data where they actually getting from from charter.
Charter just a board members so they can sell comscore data.
<unk> charter, giving comscore differentiated data proprietary data.
And we asked them to perhaps provide some relief.
For those data costs, which is impacting comscore has ability to invest in itself you saw yesterday.
They've got relief through 2022, and 2023, and while Comscore is not going to renegotiate the price because that would probably.
Look.
Make every other customer that buys data from from charter come back to them and try and renegotiate what they did was extend the deal from seven to 10 years with no price increase.
So they've been doing all the things that we wanted them to do since we put all of our thoughts.
Into those two letters and so it's hard pressed for me to pound on them.
When theyre doing what we've asked.
And all of that being said.
When we started writing those letters the stock was around $3 50, it went to a dollar or two on Friday literally a dollar or two.
And so that's the definition of a bear market no matter. What this company is doing to effectively run itself better than at any time that it has in the last four or five years nobody cares.
And so that's the frustration with 22 is that even when companies are doing the right things and not getting rewarded and forget about not getting rewarded the stock got punished I mean, when Comscore was $2 50, it was trading at a quarter of the value of Nielsen, which sold itself as you know.
At four times revenue Comscore is trading at one times revenue with 10% EBITDA margins. So it's not like the stock started this decline as some sort of lofty valuation, which made no sense.
It was literally trading at a quarter value of the company that has completely failed the industry that other companies are taking market share for <unk>.
So anyway, that's my long winded version of Comscore. They report Tonight.
We'll meet with them tomorrow, and will assess the quarter and we will listen to what they have to say, but that's been emblematic of 2022, even when you really haven't been wrong, you've been wrong. It's one thing to be wrong and get punished. It's another thing to be writing be wrong.
So that Comscore lowest third third party capital on Matt There's nothing to add on third party capital Adam I know you.
You ask every quarter and I appreciate that.
We have a new account that we've set up earlier in the middle of the year. We have another one that we're working on today.
I wouldn't call it a $100 million count by any stretch of imagination, but somebody that wanted us to manage money.
Quite frankly.
Some of the capital that we have.
There was a redemption this past quarter.
Mostly to do with rebalancing as most pension accounts are doing from equities into bonds because rates are up.
When that happens we have to sell when we sell that is impacting the holdings of 100 and gaming recapitalize and that gets back Adam through our points in prior call calls where only when the economics make sense when we take on the capital because the nuisance of giving our money back to people when they want it is impact.
<unk> permanent capital.
And I think you can understand that we adore permanent capital, but when you're managing other people's money and you don't have gates up and they want their money back you're impacting turn.
Potentially in a negative way so.
And then we are we did hire Matt <unk> seen it came from evermore.
Which is a very well respected asset management company.
Actually nearby of known a bunch of folks over there for many many years, Matt is NYU Columbia Grad, so he's well versed in Graham and Dodd.
He's come with an energy and a focus.
Our real intellectual curiosity that is serving us well, so far and it's early days.
Just quickly on Matt.
Will that impact the idea generation going forward.
If you can just quickly comment on that thank you.
Well, if it doesn't get better I dunno wise here, so it should enhance it should increase it.
That's why we brought him onboard we didn't bring them on board because if.
We wanted some 22 year olds.
New models for us I could have hired at Grad.
We hired him because he's had.
Years of experience in the industry.
Fixed stocks look I'm, a I want people to pass or fail based on their own recommendations.
Our game Adam as you know you either.
Home everyday of my career in either won or lost and while that's wears on you over time.
Especially this year. This is the business that we've chosen to be in because we like keeping score well, Matt likes keeping score two so the hope is that it will enhance.
The idea generations.
Flow and hopefully there'll be more quantity, but most important there'll be better quality.
Well, thank you and good luck over the rest of the fourth quarter.
Thanks, Adam a finance Chicago next time on there.
Sounds good.
Our next question Hi, Steffen go ahead.
Hi, there.
I wanted to ask a little bit about one of them.
I know you guys have been saying, it's been disappointing for numerous quarters now and you've had issues with trust in management.
But you are increasing your holdings like every every slide I see and.
I am assuming there is something.
As far as like managed.
Obviously, you guys thinking about activism in that holding is there anything you can publicly disclose.
Well the main thing that we did this year.
Is increase our holdings vis vis the rights offering and anything else that we've done is negligible.
So.
And we did show with the notion that it is our expectation.
This business will be cleaned up.
Vis vis <unk>, they will increase their EBITDA margins, they will cease to have supply chain issues with the one product they basically get from IBM. They haven't told us that but we think it is from IBM that.
It is important for their tape products.
And they will sell this company and then this nonsense and that is our expectation of the board.
That this is a clean up in a sale they don't want to sell anything today.
You are in the middle of the supply chain.
Depression with regards to the whole semiconductor storage.
Industry and.
So selling today is completely.
The useless exercise can't get anybody's attention in your stocks at all time lows.
So I.
I'd say the activism that we've done there has been done behind the scenes.
We have written letters to the board that we have not made public but.
I wouldn't.
Sure.
I would not think by any stretch of imagination that we're not ready enable to become a little more active in our.
Disappointment with almost everything that's gone on there in the last year.
Including parts of management, which we expect to be changed out.
So.
Again, youre going to get things wrong, we got it wrong.
I thought the rights offering clearly was the bug wasn't.
I don't know why it wasn't the bottom nothing really his transpire to the negative.
On that point other than the market's been a mess and this is not the kind of company maybe that you want to own in this market.
It's obviously traded down with the rest of the.
The tech names, but thats, where we are.
I don't expect to own this company in a year.
Maybe year and a half and I think this will be hopefully at a dead and buried situation for us with disappointment is always one of our biggest.
Winners.
<unk>, we bought it at this price essentially little higher when they were delisted.
In 2017.
2018, 18, I think it was.
Went from one to eight sold a bunch of it half of it went back to two or so on the COVID-19.
Bought a bunch back then and sold a bunch of Iran. Again to eight and we got caught this time.
Anything else.
And how do you feel about the current environment with activism generally I mean, I am sure well you talked about it yet holdings are depressed across the board.
That's probably a value to extract somewhere across any and all.
Any which way at some of the holdings here in <unk>.
You feel like it.
Time for you guys to get more vocal or.
I think it's more of a sit and wait thing as the market sorts itself out.
Or is it where you think your thoughts how about let's.
Talking about Comscore for example.
I do I want them to sell the business I do so I want them to sell the business now I don't.
I mean, do I want potbelly to sell itself I do.
Is today, the right time to sell it it's not I mean these.
These are really.
For the most part of the company, we own as well run good people good businesses brands franchises, whose stocks have been slaughtered.
And so many of them I don't want to be a public anymore, but we're not going to call on the board to sell the company when the stock.
Comscore when the stocks at a $1 20, I mean, it was just at 252 months.
Two months ago, and then I watched it go down like 27 out of 29 trading days it was down unknown unknown news.
So.
I mean, we talk to our companies all the time I, just don't know what to tell them right now because.
We just want them to run their businesses and get to the other side of this have the shares appreciate and then be put into a position where they can make better decisions at a better time.
And we will push them to do that.
I, just don't think the time for being.
Vocally active I mean, I'm I'm, an intellectually honest person.
Wondering what sure so what am I thought quantum go sell yourself for $1 50, I don't want that.
Don So and it's just a stupid time, they're not going to be able to get anything done.
So.
But we can push behind the scenes.
To get the kinds of activity to kill kinds of announcements that we're getting out of Comscore, which are actually impactful to its business and then we can deal with that.
The whole enterprise.
At a time, where we're not hiding under our desks on the day to day basis does that answer your question.
Yeah, and as far as D wave is concerned.
I guess the.
These back has kind of been underwhelmed in at least the price pricewise.
Any color or anything you can add to that.
Okay.
They not only you want to add other than it is.
It's like not a company at this back.
And it's trading like this math like every other back it seems like that's come out here in the last year and a half staying on the office, Yeah, Hey analogue.
B price discovery that happens they've got a.
It doesn't help when they come out on their first call.
The lower revenue guidance.
And so I think the.
Yes.
It's got a lot of promise and I think that's what everybody looks at quantum computing in general.
And they've got to show that they can deliver and now they're a public company they've got to do that.
Under the watchful eyes are all investors and that'll be what determines how the company progresses.
It's analogous to like a biotech.
It's a lot of a lot of substantial prom.
Promise and potential.
And the question is can they showed that theyre, making progress to get to that point.
We've owned <unk> since what year 2006, 2006 company, who has been around since 1999 I believe yes.
<unk>.
It is an idea stock still.
I mean, the technology. They have there is off the charts.
<unk>.
Whether it's gaming or Neil I don't know how familiar you are with the industry. They are in a position right now where they actually have a commercial business, albeit it's not a $1 billion.
The new business.
But I have no idea.
Dominic I'm, a graham and Dodd value Guy I, just got here five years ago like I am.
So tired of talking or looking at deep we can't even sell it.
We're restricted so whether it's 12, 1% and five six.
None of it makes any sense to me.
In this environment I don't think he really wanted to own idea stocks.
But in a better environment, you may want to own idea stocks. So we're going to have to figure out what we wanted to do with this thing when the time comes but we're restricted it and as you know.
To some extent.
Unless the thing goes to 20, or 30, which I'm not saying it cant. This has been a gigantic waste of time.
And then willimantic of the prior company that existed before $180.
There wasn't just one D wave there was like 15 D waves.
And they all provided a gigantic headache to the shareholder.
I'm grateful that it's out it's public.
Do have interesting technology, and we will see where what happens here over the next.
Two to three years or two to three months or whatever and by the way if their technology.
He is as good as either they think it is a we think it is or the industry thinks it is.
And then Google can just write a check for $1 billion and take them out.
Or Amazon or IBM.
They believe that.
These guys have distinctive technology, im not saying thats going to happen, but it's a possibility.
Thanks for the call I appreciate the insight guys. Thank you.
Yes. Thank you.
There are no further questions in the queue.
So thanks, everyone.
I've long made fun of folks that spend a lot of time talking about the long term because usually when the investors were talking about the long term remains the short term is.
It has not been a pleasant experience and we've spent a little bit of time talking about the long term so.
We've been as transparent with you from day one.
Through good times, and bad times, and there clearly have been infinitely more good times.
And then the new years like 2022.
But we will use this environment.
To sift through.
The market and really try and find those companies that we think can have a 100% returns in there.
They exist, but I mentioned earlier, we have comp score just gets back to where it was two months ago with a 100% return.
And theres many like that the good news for US is out of the $8.10 worth of book value $6 50, or in our cash and public related assets. When we first got here.
Look value was close to 650 or seven there was only $2 a share in our new strategy.
Making it very difficult to grow our book value. If the majority of it was either going to go sideways or down which had ended up doing in the last five years. While we start this next leg of the cycle and I don't know if we're in the end of this.
Bear market or the middle of the bear market or whatever but let's assume we're near the end.
And we'd like to think we are because many of the stocks are trading at valuations they havent been at ever.
When we started this bear market.
Market cycle with $8 10 book value of $6 50.
Cash and liquid securities. So, it's a very clear to me.
How if we get things right, how the path to create significant value from year exists and we hope to look back on this this period in three years and say Oh. Thank God. We it was terrible to go through it but thank God, we have it because look what we've done as a result.
And we will circle back in three years and look back in 2022 and see if the things that we're buying today.
Were the right things to buy.
Not only have the.
The vision of hindsight to figure out if.
If thats the case, we think we're doing the right things and we will look back in three years and hopefully we have so with that group.
Good luck the rest of the year will be with you back in February to early March to review Q4 if.
If you need to find us.
We're around vis vis E mail <unk> text, if you want any follow ups. So thank you very much for your time today and have a great day.
Thank you very much and you can now disconnect.
Good.