OpenAI Inching Closer to Becoming a Public Company Is a Big Positive for This Holding
The position's investment portfolio has multiple IPO candidates to further fuel its dividend stream.
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Folks, in case you may have missed it, I’m sitting in for Doug today over at the Daily Diary. Be sure to drop by and see what we’ve got going on and share your thoughts in the Comments section at the bottom. It’s a good group, just like all of you here at the Pro Portfolio, and you may find some helpful things. Give it a whirl.
With that PSA over and done, let’s talk a bit about SuRo Capital SSSS and why, so far today, those shares are bucking the market trend. To do that, let’s first remember that inside SuRo’s investment portfolio, its second-largest holding exiting the June quarter was in OpenAI. Odds are with the IPO lockup expiration for CoreWeave CRWV, that OpenAI position is back to being SuRo’s largest holding.
We bring this up because it is being reported that OpenAI is closer to converting into a more traditional for-profit company. Details, including the ownership stake held by the nonprofit, have yet to be ironed out, but they're likley to be in the coming months. Other hurdles include addressing OpenAI’s relationship with Microsoft MSFT, but that appears to be under way. Yesterday, the two companies said they had signed a “non-binding memorandum of understanding (MOU) for the next phase of our partnership” and they are “actively working to finalize contractual terms in a definitive agreement.”
The ultimate goal for OpenAI would be to become a public company, which would allow it to tap the public markets, as needed, but also give it a liquid currency for acquisition opportunities.
A potential IPO of OpenAI, which could be a 2026 event, brings us back to our position in shares of SuRo Capital. At the end of the June quarter, SuRo’s position in OpenAI was valued at $27.8 million vs. a $17.7 million cost basis. Driving that valuation was the $300 billion valuation assigned to OpenAI earlier this year.
As OpenAI completes its current funding round, the one related to the potential $500 million valuation, SuRo will need to resize the fair value of its OpenAI stake higher. That and movement in its other investments will facilitate changes in SuRo’s net asset value per share, most likely higher.
We could get an indication of this in early October, given SuRo’s penchant for sharing a preliminary investment portfolio update soon after the close of each quarter. With September-quarter monetization events, including CoreWeave’s lockup expiration and the IPO of GrabAGun (PEW), we would expect that portfolio update to also include something about SuRo’s next dividend payment.
Our thinking is that the combination of SuRo’s monetizing ServiceTitan (TTAN), CoreWeave, and GrabAGun will fund its dividend stream through the end of this year and put a year-end special dividend in play. As we turn to 2026 and the continuation of that dividend stream, potential IPO candidates in its portfolio, including OpenAI, Plaid, Liquid Death and Canva, will serve that purpose.
Based on SuRo’s next investment portfolio update, we will revisit our existing price target, as others will likely do. And depending on the company’s dividend announcement, we will be putting pencil to paper to determine the potential size of what’s to come on that front before we close out the year. Remember, our play with SSSS shares in the Pro Portfolio is based on total return.
At the time of publication, TheStreet Pro Portfolio was long SSSS.
