We’re Exiting This Position Amid OpenAI IPO and Market Concerns

Symbol	Transaction Type	# Shares Traded	Recent Price $	Shares Owned After Trade	% Portfolio
NSLR	Sell	22,695	9.61	0	0.0

After you receive this alert, the Pro Portfolio will sell all 22,695 shares of Neostellar Capital (NSLR) at or near $9.50. This trade will close out our position in NSLR shares, returning a mid-single-digit gain.

We are making this move with Neostellar for multiple reasons. The largest one stems from comments made by OpenAI CEO Sam Altman about that the company’s IPO timetable. The timing of the IPO has bounced around a bit over the last few months, but the latest from Altman indicates that activity is firmly off the table for this year. As we shared in our opening comments this morning, we continue to think the OpenAI IPO is a “when” not an “if” event. However, the extended timetable also pushes out one of the more closely tracked catalyst events for Neostellar to monetize its investment portfolio.

Note that we said “one of.” There are other holdings in the Neostellar portfolio, including its largest one, Whoop, and we may very well see Neostellar’s net asset value benefit from private capital raises tied to other holdings.

However, the concern we have in the near-term is two-fold. First, the re-adjustment to the OpenAI IPO timetable, and second, the impact of the current geopolitical and macro environment on consensus S&P 500 EPS expectations, that benchmark’s valuation and the same for the IPO market, as the Fed is increasingly expected to lift rates later this week.

One of the underlying risks is that higher risk free rates pull capital from the market, especially if inflation pressures and geopolitical uncertainties remain on their current path. That has the potential to temper larger IPO market expectations, while calls to slow the pace of AI development are likely to do the same for private capital raises for AI-related companies.

These are likely to be near-to medium term headwinds for NSLR shares. Also, let’s remember that exiting June, Neostellar faced repaying $35.8 million in 6.0% notes by the end of this year. At the end of June, there was $12.9 million in cash on the balance sheet, and the company’s remaining investment in CoreWeave (CRWV), per its 10-Q for Q2 2026, stood at ~ $15.4 million.

Since then, CRWV shares have move lower and they are poised to do so again today. While we don’t know if Neostellar exited that position earlier in the current quarter, it’s fair to say that that if it didn’t, the fair value for that position is going to be less than it was at the end of June when CRWV shares were at $99.54.

We also know the $20 million investment from Magnetar has been received, and that total capital picture, along with any other minor portfolio exits QTD, give Neostellar ample funds to handle the upcoming debt obligation. But how much remaining capital it leaves to fund new or incremental investments is the question. That’s where our concern for a slowdown in the IPO market comes into play.

Bring in OpenAI’s pushed-out timetable, and concerns over efforts to reign in AI and slow development have the potential to restrain NSLR shares near-term or bring additional pressure on them.

Measured against that prospect, we are aiming to lock in our remaining gain on NSLR as best we can this morning, and build up our cash position even further as we head into what tends to be one of the seasonally most challenging periods for the market. An analysis of data spanning 1928 to 2025 by Citadel Securities finds that the second half of September has averaged a -0.91% return, making it the weakest two-week period of the year.

While we recognize Neostellar’s investment acumen, in that environment and for the reasons laid out above, prudent portfolio management calls for more cash on hand. As we remove Neostellar from the Portfolio, we will place it in the Bullpen for reconsideration.

Again, we continue to see the OpenAI IPO as a “when” event, not an “if” one. We also suspect that at some point Neostellar will monetize its position in Whoop. Those are just two reasons to keep tabs on the name, and reviewing its investment portfolio provides several others.

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(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade’s executed price here. Be sure to toggle the chart to sort by Purchase Date.)

At the time of publication, TheStreet Pro Portfolio was long NSLR shares.