Professional
Added to YB: 2026-03-03
Pitch date: 2026-02-28
HTGC [bearish]
Hercules Capital, Inc.
-4.51%
current return
Author Info
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Company Info
Hercules Capital, Inc. is a business development company. The firm specializing in providing private equity, venture debt, and growth capital to privately held venture capital-backed companies at all stages of development from mid venture to expansion stage including select publicly listed companies and select special opportunity companies that require additional capital to fund acquisitions, recapitalizations and refinancing and established-stage companies.
Market Cap
$2.6B
Pitch Price
$13.97
Price Target
N/A
Dividend
13.23%
EV/EBITDA
10.75
P/E
7.66
EV/Sales
9.06
Sector
Capital Markets
Category
value
The Myth of Hercules Capital
HTGC (short): 35% software exposure ($1.5B, 70% of NAV post-leverage) marked at 100¢ despite sector collapse; PIK income doubled to $56M but cash collected fell 73% to $5M; total div ($1.88) covered by only 3¢ vs $1.91 NII (105.7% cash coverage); premium compressed 60%→25%, risking Saylor-style doom loop if hits zero; cumulative 3bps loss rate nets equity gains vs losses (potentially unique metric); portfolio turnover claims misleading as 64% of fundings went to existing borrowers per earnings calls; risks: phantom income, thin div coverage, premium collapse halting accretive equity issuance
Read full article (20 min)