1/12/2017

Deep Discount to its Net Asset Value;HARRIS & HARRIS GROUP (TINY)

HARRIS and HARRIS GROUP  (TINY) operates as a BDC (Business Development Company) similar to venture capital/private equity. Harris and Harris (TINY) provides a public way to participate in the open market. The stock is operationally troubled but I believe the current price may offer a value trade for investors. I can't know but currently own shares.
January 10, 2017 management held a shareholder meeting ("transforming the future") to discuss restructuring benefits.
Announced changes .... separate Harris and Harris Group into two companies.
A)   180 Degree Capital ("180") to manage existing portfolio in what they believe are undervalued small public companies in a structure that seeks to reduce Harris and Harris expenses.
B)   HALE.life Corp ("HALE")  an operating company that takes a portion of Harris Group precision health and medicine assets and combine them to deliver products with potential to change how physicians provide healthcare.

Harris Group believes the benefits of restructuring are 1) best opportunity to increase shareholder value 2) focuses the company and improves strategic messaging 3) allows maturing portfolio to reach exits in a cost effective manner 4) provide income and net asset growth over shorter more predictable time frames. 5)enable precision health and medicine assets to grow by combining them into a controlled operating company. 

Therefore, 180 Degree Capital ("180") formed from investment management business of Harris group restructured into a closed end fund from its BDC. Management believes the current structure has inherent unrecognized value. The new simplified structure and focus management believes could lead to partnerships and other opportunities. 
Investment focus going forward is to identify deeply undervalued public companies, purchase meaningful ownership/control, hands on constructive activism, with an initial focus on less than 100 Million in market capitalization. If the current BDC structure is changed to a closed end fund it will result in lower operating expenses from less regulatory burden.
The proposed restructuring of the Company, including the formation of 180 Degree Capital Corp ("180") and HALE.life Corp. ("HALE") requires shareholder and regulatory approval.






 
 











52-Week Change        -33.71%
% Held by Insiders    7.58%
% Held by Institutions    31.90%
 






































































Long TINY





2 comments:

bart said...

Taking a tiny position in TINY. Great work shadow.

bart said...

Great move for TINY today. I think IMN and PCO are extremely close to breaking out.