180 DEGREE CAPITAL CORP. ISSUES UPDATE LETTER TO SHAREHOLDERS - Seite 3

You have entrusted us with your investment in TURN, and we entrust management teams with TURN’s capital.  We expect our management teams to maneuver through changing environments.  Our companies are not going to sit on their hands and do nothing.  They are going to proactively manage their business.  Nothing is static.  We like our holdings, we like our management teams, and we expect them to do whatever is necessary to ensure viability.  Although I am certainty not a Pollyannaish person, I do think we have a good collection of assets.  If we felt otherwise, we would sell and move on.

• On the private side, one can also expect some degree of dislocation as many of our holdings rely on continuous funding to keep going. Our board of directors formally values our private holdings at the end of each quarter.  That said, based on the information available as of the date of this letter, we currently estimate that potential writedowns of the private portfolio equate to roughly half of the decline Russell Microcap Index on a relative percentage basis.
   
• As for where our NAV shakes out this quarter, first let me say the quarter still has a few more days left.  We usually spend the first few days after the quarter has ended going through our formal process for valuing the private portfolio. My point is all of this can change for the better, or for the worse.  Our public portfolio companies have thus far performed better than the indices and we currently estimate that our private portfolio has performed better than our public portfolio.  These two data points mean that we currently believe our NAV has not declined by the same 40% decline of the Russell Microcap Index or the 44% decline of the Russell Microcap Value Index.  And yet, our stock price has collapsed by 48% to a lower price than what it was when we took over an incredibly broken Harris & Harris Group.
   
• As for our own stock price, I am deeply disappointed by the decline, although I understand the indiscriminate selling that comes with redemptions and margin calls.  Clearly, I think the valuation is absurd.  Our management team bought stock today in addition to multiple purchases throughout March.  We will continue to add to it as we are now nearly trading at our cash and public holdings. We are not thinking about where our share price will be in a week, but rather do we think it can be materially higher sometime down the road.

How long will this last?  Much depends on our own behaviors. Today, World Health Organization Director-General Tedros Adhanom Ghebreyesus said the following about the rising COVID-19 cases, “We are not prisoners to statistics. We're not helpless bystanders. We can change the trajectory of this pandemic.”  Taking short-term pain by quarantining and trying not to infect others will flatten the curve and help bring an end to this crisis.  Or we can ignore the call from scientists and health organizations by continuing to pile on to beaches and throw social distancing to the curb.  The actions taken over the upcoming days, weeks and months will determine our economic and social path forward.