Neostellar Capital (NASDAQ:NSLR) reported third-quarter 2026 net asset value of $334.7 million, or $12.64 per share, down from $13.44 per share at the end of the second quarter. Chairman and Chief Executive Officer Mark Klein said the decline included a reduction in the fair value of the company’s WHOOP investment, reflecting recent secondary-market activity.
Chief Financial Officer Allison Green said the quarter-over-quarter NAV decline was driven by a $0.36-per-share decrease from net changes in unrealized appreciation, a $0.29-per-share decrease from net realized losses on portfolio investments, and a $0.15-per-share decrease from net investment loss.
The company completed its transition to an externally managed structure on July 15, following shareholder approval. Neostellar Advisors LLC, jointly owned by former SuRo Capital Management team members and Magnetar Holdings, became the company’s investment adviser. Klein said the arrangement is intended to combine Neostellar’s venture-backed investment experience with Magnetar’s capabilities in credit, structured capital and AI infrastructure.
Portfolio concentration and AI exposure
As of Sept. 30, Neostellar’s five largest positions were WHOOP, OpenAI, VAST Data, TensorWave and Blink Health. Those holdings represented approximately 72% of the portfolio at fair value, while the 10 largest positions accounted for about 87%.
Consumer goods and services was the company’s largest investment theme, representing roughly 42% of portfolio value, followed by artificial intelligence infrastructure and applications at 36%. Software-as-a-service investments represented about 9% of the portfolio, according to Green.
Klein highlighted the company’s investments across AI infrastructure and applications, including OpenAI, CoreWeave, VAST Data, ClickHouse and TensorWave. He said Neostellar sees continued demand for computing, data management and analytics infrastructure as enterprise adoption of AI expands.
Regarding OpenAI, Klein cited the company’s March financing, which he said involved $122 billion in committed capital at an $852 billion post-money valuation. He also referenced Reuters reporting that OpenAI’s annualized revenue run rate was nearly $50 billion in September. Klein noted that reports of a potential financing at a $1.25 trillion valuation were not reflected in Neostellar’s Sept. 30 valuation because the transaction had not been officially confirmed.
Neostellar invested $9.5 million in ClickHouse during the second quarter. Klein said the database and real-time analytics provider raised $400 million in a January Series D financing and reported that its serverless cloud business had exceeded $250 million in annualized revenue run rate in May.
The company also completed a $20 million commitment to TensorWave through a Magnetar-managed vehicle in the second quarter. TensorWave, which provides AMD-powered cloud infrastructure for AI workloads, raised $350 million in a June Series B financing at a $1.55 billion post-money valuation, according to Klein.
WHOOP valuation and potential monetization
WHOOP remained a significant Neostellar holding following years of appreciation in the investment. Klein said WHOOP announced a $575 million financing in March at a $10.1 billion valuation and reported more than 2.5 million members. The company also disclosed 103% year-over-year growth in 2025 bookings, a year-end bookings rate of $1.1 billion and positive operating cash flow during 2025.
However, Neostellar reduced the fair value of its WHOOP position during the third quarter based on recent secondary activity. Klein said the March financing valuation did not independently determine the fair value of the specific securities owned by Neostellar.
The company is exploring ways to reduce its WHOOP exposure over time, with management of the portfolio company aware of Neostellar’s intention to monetize part of its investment. Klein said the timing and size of any sale would depend on available liquidity, pricing, restrictions and market conditions.
Realizations, liquidity and capital allocation
During the quarter, Neostellar fully exited Learneo for $9.4 million, resulting in a realized loss of approximately $5.6 million. It also exited Aventine Property Group through a roughly $31,000 distribution, producing a realized loss of about $2.5 million, and abandoned its Catona Climate investment, resulting in a $1.3 million realized loss.
The company sold 143,655 shares of GrabAGun Digital Holdings at an average net price of $3.12 per share, generating approximately $448,000 in proceeds and a realized gain of about $295,000. Neostellar also received about $2 million in proceeds from CW Opportunity 2 LP, its CoreWeave-related special purpose vehicle investment. The distribution included approximately $600,000 of return of capital and $1.4 million of realized gain, subject to potential adjustment for performance fees.
Neostellar ended the quarter with approximately $42.2 million in liquid assets, including $40.9 million in cash and $1.3 million in unrestricted public securities. It also held approximately $15.2 million in public securities subject to lockups or other sales restrictions, including its remaining CoreWeave-related holding and Lime shares that the company expects to become freely tradable in December.
Green said a portion of cash will be used to repay the company’s 6.00% notes due Dec. 30, 2026. Klein told analysts that retiring the debt is “paramount” and that Neostellar intends to do so by year-end.
During the quarter, the company received $20 million from a 6.5% redeemable promissory note issued to a Magnetar-affiliated entity. The note matures in three years and would be mandatorily redeemed through common-stock issuance following a qualifying equity financing of at least $230 million.
Neostellar’s board also extended its discretionary share repurchase program through Oct. 31, 2027, or until the company repurchases $64.3 million of common stock in aggregate. About $25 million remains available under the authorization. Klein said the company would weigh repurchases against new investments, debt repayment and liquidity needs, but intends to deploy capital toward buybacks as portfolio monetizations create available capital if shares continue to trade at a substantial discount to NAV.
About Neostellar Capital (NASDAQ:NSLR)
SuRo Capital Corp. is a business development company. The firm seeks to invest in growing, late stage, venture capital-backed private companies. SuRo Capital Corp. was founded in 2010 and is based in San Francisco, California.
