We've Got a New Price Target for Our BDC Holding
We see multiple reasons why the net asset and dividend stream should continue to rise.
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We’ve been expecting a preliminary Q3 2025 portfolio update from SuRo Capital (SSSS) , and Wednesday night the management team came through.
As of September 30, SuRo held positions in 37 portfolio companies — 33 privately held and four publicly held, some of which may be subject to certain restrictions and/or lock-up provisions. Exiting the third quarter of the year, the portfolio’s net asset value (NAV) per share is estimated to be between $9.00-$9.50 per share, up from $9.18 at the end of the June quarter.
Baked into that estimate NAV are a few things. First, during the September quarter, SuRo invested $5 million into HL Digital Assets, a company investing in HYPE, the digital token of Hyperliquid. As background, Hyperliquid is a decentralized cryptocurrency exchange designed to enable fast, transparent, and secure digital asset trading.
The NAV figure also includes exposure to CoreWeave (CRWV) . As we learned in SuRo’s press release, as of September 30, it monetized less than 20% of its initial investment in CW Opportunity 2, LP, the vehicle by which it is directly invested in CRWV shares. This is a welcome surprise as the consensus view was that SuRo was likely to have cleared out its CRWV position in mid-August following the IPO lock-up expiration when CRWV shares were trading between $90-$100.
With CRWV shares rebounding in the second half of the September quarter and climbing further in October, we see that trading decision reaffirming our view about the seasoned and prudent talent behind SuRo’s portfolio.
As shareholders, we benefit by this decision because it should increase realized gains when the balance of that CRWV position is monetized. That benefits our SSSS dividend stream and also means SuRo’s NAV per share should continue to tick higher in the current quarter.
Another reason we should see that NAV per share value tick higher in the current quarter is that it continued to value SuRo’s position in OpenAI using the previously confirmed $300 billion post-money valuation. Why? The recent secondary sale of OpenAI shares, which valued the company at $500 billion, was concluded after the quarter's end.
Those two factors are leading us to bump up our SSSS price target to $12 from $10. That upside and the reasons behind it, as well as the ensuing dividend stream, lead us to reiterate our One rating on SSSS.
As we do this, we recognize that SSSS shares are trading close to 10% higher over the last two weeks. And the lack of a dividend announcement in the preliminary quarterly update could lead SSSS shares to trade off in the near term.
If that happens, as the shares settle out, that would bring an even more favorable risk-to-reward trade-off at which to pick up additional SSSS for the Pro Portfolio.
Are we disappointed that SuRo did not announce anything on the next dividend payment? We are, but we can also take comfort in what was hinted at in the press release:
As of September 30th, we have monetized less than 20% of our initial investment in CW Opportunity 2, LP, which is directly invested in the publicly traded shares of CoreWeave. Subject to Board approval, we anticipate announcing another distribution by year-end from future monetizations of this position and ongoing portfolio realizations,” Mr. Klein concluded.
We’d also point out that SuRo has around 75% of its position remaining in GrabaGun Digital Holdings (PEW), which is another potential source of dividend funding, as that position is also monetized.
At the time of publication, TheStreet Pro Portfolio was long SSSS.
