Stockholders of Firsthand Technology Value Fund (NASDAQ: SVVC) Urged to Vote to Terminate Investment Advisory and Management Agreements with Firsthand Capital Management After NEGATIVE 78% Share Price Performance Over Nearly Ten Years

5/7, 3:04 PM (Source: GlobeNewswire)
  • Firsthand Capital Management collected $33.8M in fees over nearly ten-year period during which the SVVC stock price declined 78%.
  • Rawleigh Ralls, a professional investor/portfolio manager and long-time stockholder of SVVC, owns approximately 3.7% of SVVC common stock.
  • MR. RALLS URGES SVVC STOCKHOLDERS TO VOTE IN FAVOR OF PROPOSAL 3, SEEKING TO TERMINATE THE INVESTMENT ADVISORY AND MANAGEMENT AGREEMENTS BETWEEN SVVC AND FIRSTHAND CAPITAL MANAGEMENT, AT SVVC’S MAY 25TH ANNUAL MEETING.

BOULDER, Colo. and SAN JOSE, Calif., May 07, 2021 (GLOBE NEWSWIRE) -- Rawleigh Ralls, a long-term investor and beneficial owner of 3.7% of Firsthand Technology Value Fund, Inc. (NASDAQ: SVVC), today announced his strong and urgent support of a binding proposal to terminate the investment advisory and management agreements between SVVC and Firsthand Capital Management, Inc., which is being submitted for consideration by stockholders at the Fund’s 2021 Annual Meeting on May 25, 2021.

  • Mr. Ralls has been a stockholder of SVVC since 2013 and currently owns 3.7% of SVVC’s outstanding common stock. He is an experienced board member and a successful investor/portfolio manager, who has founded several investment funds.
  • Mr. Ralls has known Kevin Landis, Chairman of the Board, CEO and President of SVVC, for over 7 years and serves on the board of IntraOp Medical, one of SVVC’s portfolio companies. Over the past ten years Mr. Landis has had ample opportunity to prove his competence in managing the Fund’s investment portfolio, but the results clearly demonstrate that he has failed in this role.
  • Mr. Ralls is voting AGAINST the election of both board members up for re-election, Mr. Burglin and Mr. Yee, because he holds the board responsible for SVVC’s performance and not acting to change the Fund’s management structure and advisory relationship.
  • Mr. Ralls is urging all SVVC stockholders to SUPPORT a BINDING proposal to TERMINATE the investment advisory and management agreements between Firsthand Technology Value Fund, Inc. and Firsthand Capital Management, Inc.
  • If the investment advisory and management agreements with Firsthand Capital Management are terminated, Mr. Ralls will work with other stockholders and the current or a newly appointed board of SVVC to maximize the value of the current portfolio.
  • Mr. Ralls is available to speak with any stockholder who would like a more detailed description of his experience with Mr. Landis and Firsthand Capital Management and why he believes Mr. Landis and Firsthand Capital Management are unqualified to continue in their current roles. He is also interested in sharing his ideas on how to help SVVC realize its potential while reducing fees and expenses. Mr. Ralls can be reached via email at rallsrawleigh@gmail.com

The following are Mr. Ralls observations based on his investment experience and facts from SVVC’s public filings:

1.SVVC’s performance has been abysmal and is even more alarming given that it occurred during one of the biggest bull markets in recent history.
  
2.As illustrated in SVVC’s recent Form 10-K, a $10,000 investment in SVVC stock at its inception on April 18, 2011 would be down 78% in value and worth just $2,190 on December 31, 2020, while investments in the broader markets like the SP500 and Nasdaq are up 350-500% over the same period. According to cfainstitute.org data, venture capital fund returns are even higher.
  
3.Yet according to SVVC’s annual 10-K filings, Mr. Landis’ company, Firsthand Capital Management, has been paid over $33.8M in advisory fees over the last 10 years, while the Fund has suffered losses of well over $100M in total assets from its peak in 2014.
  
  
4.Mr. Landis’ investment selection and stewardship has been dreadful with an intolerable number of his substantial investments resulting in “ZEROS.” Below are a few examples:
  
       
  InvestmentTotal InvestmentInvestment DurationYear Written Down to Zero 
  QMAT$20.7M~7 years2019 
  Telepathy$7.95M~ 5 years2019 
  Aliphcom$10.1M~ 4 years2017 
  VuFine$5M~ 4 years2019 
  Total$43.75M   
  
5.The current portfolio holdings performance has also been dismal. Below are the top portfolio positions using year-end valuations vs. total invested capital as of December 31, 2020 (Form 10-K).
 
  • Pivotal Systems – Initial investment in 2012, total invested by SVVC ~$3.6mm, current value $22.5mm, UP 625%.
  • IntraOp Medical – Initial investment of $26mm in 2013, total invested by SVVC ~$50mm, current value $25mm, DOWN $25mm, or 50% from initial investment, approximately 8 years ago.
  • WrightSpeed – Initial investment $6mm in 2013, total invested ~$36mm, current value $23mm, DOWN $13mm, or 36% from initial investment almost 8 years ago.
  • Revasum – Initial investment 2016, total invested by SVVC ~$13.5mm, current value $12.6mm, DOWN 6.6% over the investment period.
  • Hera Systems – Initial investment of $2mm in 2015, total invested by SVVC ~$11.2mm, current value $3.6mm, DOWN $7.6mm, or 68% from initial investment.
  • SVXR – Initial (and total) investment $4.1mm in 2016 by SVVC, current value $5.38mm, UP 32%.
  • Silicon Genesis – Initial investment $2.4mm in 2011, total investment by SVVC of $8.4mm, current value $1.33mm, DOWN 84% from initial investment.

The only real winner in the current portfolio, Pivotal Systems, looks to have been Firsthand’s ‘source of funds’ over the last year or longer. Mr. Landis has been selling this winner so he can re-invest in the portfolio’s losers. One year ago, the Fund owned 45M shares of Pivotal Systems vs. the 31M shares owned as of December 31, 2020. Mr. Landis has a long history of selling his winners to prop up his losers (the portfolio once included FB, NFLX, NUTX, ROKU, TWTR and WKDY).

In summary, the portfolio’s long-term results strongly confirm that Mr. Landis and his firm’s management contract should be terminated. The the current board should easily be able to manage the portfolio in the interim while seeking an alternative management solution, and Mr. Ralls is willing to volunteer his time, resources and experience to assist with this process at no cost to SVVC stockholders.

Mr. Ralls has over 30 years experience in the investment community, including an eight-year career at Goldman Sachs and as co-founder of two investment funds, Precept Capital Management and Lacuna Capital LLC. He is currently a director on six company boards, including one public (Tucows, Inc. Nasdaq: TCX) and five private companies in the software and technology space. Mr. Ralls has been on numerous other company boards, raised considerable investment capital and advised many public and private company management teams.

Mr. Ralls graduated from the University of Arkansas in 1984 and received an MBA from Southern Methodist University.

IMPORTANT INFORMATION CONCERNING THIS COMMUNICATION
This press release is being issued pursuant to Rule 14a-2(b)(1) promulgated under the Securities Exchange Act of 1934. This is not a solicitation of authority to vote your proxy. I am not asking for your proxy card and will not accept proxy cards if sent. The cost of this communication is being borne entirely by Rawleigh Ralls.

Contact:
Rawleigh Ralls
rallsrawleigh@gmail.com


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