($ in 000's, except per share amounts)
Financial Information as of June 30, 2018 (see below for selected current information):
|Cash & marketable securities (1)||$6,020,534|
|Alibaba Group Holding Limited||$71,162,892|
|Yahoo Japan Corporation||$6,569,518|
|Deferred tax liabilities on unrealized appreciation||$16,233,595|
|Margin loan payable||$3,045,770|
|Net asset value (NAV)||$62,626,875|
|NAV per share||$78.23|
|June 30, 2018||Current(6)|
|Adjusted NAV per share(2)||$98.51||$88.00|
|Discount to Adjusted NAV(3)||24.8%||22.8%|
|Adjusted NAV excluding net cash(4)||$77,292,115||$46,082,546|
|Adjusted NAV excluding net cash per share (4)||$96.55||$76.36|
|Discount to Adjusted NAV excluding net cash(5)||25.3%||26.3%|
|Number of shares||800,508||603,495|
As revised by the Fund's Board of Directors on February 20, 2018, the Fund's investment objective is to seek to increase the price per share at which it trades relative to the then-current values of its principal underlying assets (the Alibaba Group Holding Limited ("Alibaba") ordinary shares and American Depositary Shares (collectively, the "Alibaba shares") and Yahoo Japan Corporation ("Yahoo Japan") shares of common stock ("Yahoo Japan shares")). It seeks to do this by reducing the discount at which it trades relative to the underlying value of its net assets (before giving effect to deferred taxes on unrealized appreciation) while simplifying its net asset base and returning capital to its shareholders in ways that are accretive and increase shareholder value.
In addition to the Alibaba shares and Yahoo Japan shares, the Fund also owns investments in certain additional companies ("Minority Investments"), Excalibur IP, LLC ("Excalibur"), which owns a portfolio of patent assets (the "Excalibur IP Assets") and short-term investments (the "Marketable Debt Securities Portfolio"). The Fund currently intends to sell the Yahoo Japan shares and Minority Investments over time. The Fund also currently intends to sell Excalibur, though the Fund may seek to sell certain of the Excalibur IP Assets or to license the Excalibur IP Assets if the Board believes that doing so is in the best interest of the Fund's stockholders. The Fund currently intends to return substantially all of its cash, including any new cash generated by asset sales, to stockholders over time through stock repurchases and distributions, although the Fund will retain sufficient cash to satisfy its obligations to creditors and for working capital. The timing and method of any return of capital will be determined by the Board. Stock repurchases may take place in the open market, including under Rule 10b5-1 plans or in a tender offer, or in privately negotiated transactions, including structured and derivative transactions such as accelerated share repurchase transactions. The Fund currently anticipates that the amount of cash to be retained by the Fund will be at least $4.5 billion, which is the minimum amount necessary to satisfy the Fund's obligations under the Convertible Notes and Margin Loan. However, the Fund's obligations to creditors and working capital requirements may vary over time and may be materially greater than such amount, depending upon, among other factors, the cost of cash-settling any conversion obligations under the Convertible Notes, the Fund's potential obligations with respect to potential liabilities, and whether the income from the Fund's investments is sufficient to cover its expenses. The payment of liabilities, including debt obligations, may cause the Fund's returns to deviate from its investment objective. Until the Yahoo Japan shares, Minority Investments, Excalibur (or the Excalibur IP Assets), the Marketable Debt Securities Portfolio, and any other assets are sold and until any cash is returned to investors, these assets may cause the Fund's returns to deviate from its investment objective.
Consistent with its current investment objective, the Fund currently does not intend to sell its Alibaba shares in response to changes in the market price of those shares, though it reserves the right to do so. The Fund has, and may in the future sell, distribute or exchange all or a portion of its Alibaba shares, including in advance of selling other Fund assets, to return capital to its stockholders or to seek to reduce any discount or increase any premium from net asset value at which the Fund's common stock may trade if the Board believes the benefit to stockholders would outweigh the cost, including any taxes payable by the Fund, of doing so. The Fund also may sell such shares to satisfy its obligations to creditors or to pay expenses.
No assurance can be given that all or any portion of the Fund's assets will be sold or licensed, that any sales will be at prices equal to or greater than the prices at which the Fund values such assets for purposes of calculating its net asset value or that the Fund will achieve its investment objective. The Fund may hold all or any portion of its assets, including cash, for an indefinite period of time. The Fund does not currently anticipate making new investments other than for ordinary course cash management purposes or to protect or enhance the value of the Fund's assets held immediately after the completion of the Sale Transaction. The Fund's investment objective is not fundamental and may be changed without notice to stockholders.