TriplePoint Venture Growth: Don't Get Caught Going Down With The Ship

Core Viewpoint - TriplePoint Venture Growth (TPVG) has faced significant challenges, including a recent 25% dividend cut and underperformance compared to peers in the Business Development Company (BDC) sector [2][3][19]. Performance Analysis - TPVG's stock has declined over 25% since the last analysis, while the S&P 500 has increased by over 1% [3]. - The company reported a net investment income (NII) of $15.5 million, barely covering the required dividend payment of $15.436 million [3]. - TPVG missed analysts' estimates for both top and bottom lines, with a miss of $0.02 on NII and $0.84 million on total investment income [3][7]. Comparison with Peers - Among Venture Capital-focused BDCs, TPVG has performed the worst, with a negative total return since the start of interest rate hikes in 2022 [5]. - Hercules Capital (HTGC) achieved a total return of 43.37%, while Trinity Capital (TRIN) saw nearly a 22% increase [6]. Latest Earnings - In Q2, TPVG reported total investment income of $27.11 million, missing estimates by $2.25 million [7]. - The portfolio value declined from $942 million to $713.8 million, a decrease of 24.22% over the past two years [7]. Positive Developments - TPVG experienced a 44% growth in signed term sheets, with $130.1 million in commitments [8]. - The company has $50 million in cash and $300 million available on its credit facility, which may provide liquidity for future investments [8]. Dividend Coverage - The board cut the dividend due to higher-than-expected repayments and reduced fundings [10]. - At the end of the quarter, TPVG had $39.3 million in spillover income, indicating potential short-term coverage of the $0.30 dividend [11]. Valuation - Following the dividend cut, TPVG trades at a 26.5% discount to its NAV of $8.83, which is higher than the average discount of 6.46% [14][15].