On February 15, 2013,
Keating Capital, Inc.
(“Keating” or the “Company”) (Nasdaq: KIPO) reported financial results for the year ended December 31, 2012.
"Keating Capital operates a private-to-public valuation arbitrage strategy, seeking to profit from the potential value increase that we believe typically occurs when a private company completes an IPO. Our goal is to make investments that create the potential for a 2x return on our investment once the company is publicly traded and assuming our typical investment horizon of 36 months,” stated Timothy J. Keating, CEO of Keating Capital, Inc.
2012 Portfolio Activity
During 2012, we made investments totaling $26.5 million in six new private portfolio companies, approximately $0.5 million in two existing private portfolio companies (BrightSource and Livescribe), and approximately $0.5 million in Solazyme, an existing publicly traded portfolio company.
During the first and second quarter of 2012, we sold 65,000 shares of Solazyme’s common stock at an average price per share of $15.06 (net of commissions and selling expenses), resulting in a realized gain of approximately $404,000, which represents a 1.7x return on our investment over the 20 to 24 months we held these shares. At December 31, 2012, we continued to own 147,927 shares of Solazyme’s common stock, which were valued at Solazyme’s year-end market price of $7.86 per share, compared to our average cost basis of $10.18 per share.
During the third quarter of 2012, we sold 160,000 shares of NeoPhotonics common stock at an average price of $5.49 per share, resulting in a realized loss of approximately $121,000, which represents a 0.88x return on our investment (or a 12% loss) in these shares over our weighted-average holding period of 31 months. As of December 31, 2012, we no longer own any shares of NeoPhotonics.