TMT Investments: When Your Market Cap Is Smaller Than Two Portfolio Holdings (Upgrade)

TMT Investments has a $75 million market cap. Its single position in Bolt - the ride-hailing and delivery platform - is worth $77 million. Add Backblaze to that, and the two companies alone exceed what the stock market values the entire vehicle at.

What more does the market need before it stops pricing a working venture capital fund as if it's a distressed shell?

TMT (AIM: TMT.L) is setting the date for its half-year interim results covering the six months ended 30 June 2026, which the company is expected to publish around 14 August, following its traditional calendar. The announcement matters because it will provide the first snapshot of NAV after a first half that saw Scale AI revalue to $29 billion following Meta's investment, Bolt continue its valuation climb, and management persistently buying back shares at deep discounts to intrinsic value.

Let's work through the disconnect.

The NAV discount is no ordinary risk premium

As of 31 December 2025, TMT's audited net asset value per share was US$7.13, up 8.9% from US$6.55 a year earlier. Total NAV stood at US$220.8 million. The stock currently trades around US$3.40 - implying a discount to NAV of roughly 52%.

That matters because NAV per share is the underlying book value of each holding, calculated from the audited valuations of portfolio companies. A 52% discount means the market is assigning TMT shares at roughly half the value of what the portfolio is actually worth. For context, even deeply unloved closed-end investment trusts rarely sustain discounts beyond 25-30% over multi-year periods. A discount of this magnitude signals that investors are pricing in a scenario where the NAV itself is unreliable - that the portfolio companies' valuations are inflated or unrealizable.

The market's fear here is legitimate on one dimension: venture capital valuations are inherently illiquid. They're based on the most recent funding rounds, not daily trading prices. But the question is whether the discount is proportionate to the illiquidity risk, or whether it's become an overhang the company's own execution has already started to address.

Bolt and Backblaze alone exceed the market cap

TMT's June 2026 portfolio update valued its Bolt position at US$77 million. That ratio - with Bolt alone exceeding the market cap - has only grown more extreme since then.

Bolt - headquartered in Estonia, expanding across Europe and Africa - is not a speculative seed-stage experiment. It's a near-unicorn competitor to Uber, with real transaction volume, a growing delivery arm. TMT's shareholding in Bolt represents approximately 35% of the company's total NAV. If Bolt alone were traded publicly at the NAV price, it would be worth more than the entire TMT vehicle.

The bear case would argue that NAV is a paper number - that Bolt's valuation could compress, or that TMT's shares are too small to ever realize that value. But the company has already demonstrated the ability to monetize positions. In 2025, TMT received US$5.5 million from cash disposals and dividends, including partial sales of its Bolt stake at a 17% valuation uplift and a US$3.8 million partial exit from Backblaze. The partial Bolt disposal alone proves that NAV is not an entirely theoretical construct.

Management is buying at the discount

Here's where the setup moves from interesting to compelling. TMT's management team has been actively buying back shares on the open market at prices well below NAV. In December 2025, the company completed a US$1.7 million share buyback at a weighted average price of US$2.65 per share - a discount of roughly 63% to the audited NAV per share of $7.13.

More recently, the company has continued cancelling shares through its buyback programme, with purchases reported at a deep discount to NAV. Management is buying at a steep discount to the underlying asset value, reinforcing their conviction that the market is mispricing the portfolio.

This isn't cosmetic signalling. When insiders and management consistently repurchase at a steep discount to NAV, they're making a concentrated statement that the market is mispricing the underlying assets. The share count has declined from 30.8 million to approximately 30.5 million - small in absolute terms, but meaningful for a micro-cap vehicle where every cancelled share increases the NAV attributable to remaining shareholders.

What the interim results will tell us

The upcoming H1 2026 results, expected around 14 August, should provide clarity on three things:

First, whether NAV per share has continued its upward trajectory from the $7.13 closing balance at year-end. The Scale AI revaluation to $29 billion (a 138% uplift versus TMT's cost basis as of October 2024) occurred in June 2025, so it's already in the audited base. Any further portfolio company progress in the first six months of 2026 - new Bolt funding rounds, additional Scale AI capital events, or other positive revaluations - would push NAV higher.

Second, cash position. The company reported US$5.0 million in cash and equivalents at 31 December 2025 and unaudited cash of US$6.2 million as of 23 March 2026. The company carries no financial debt. That clean balance sheet means TMT isn't fighting to stay afloat - it's sitting on cash while its portfolio compounds.

Third, new deployment. In 2025, TMT made US$1.5 million of additional investments, a deliberate slowdown from US$5.9 million in 2024. In H1 2025, it made just US$0.5 million. The company has been cautious, deploying only when valuations and fundamentals align. This discipline preserves cash and avoids the trap of throwing money at overvalued deals just to stay active.

The risks that keep the discount alive

A discount of 52% doesn't persist by accident. There are real structural reasons the market stays skeptical.

The most important is liquidity. TMT's portfolio is over 50 early- and growth-stage companies across SaaS, fintech, AI, healthtech, and mobility. Most of these holdings are illiquid. Even the large winners - Bolt, Scale AI - don't trade publicly in a way that gives TMT shareholders direct access. NAV can compress if portfolio companies face down-rounds, write-downs, or write-offs. In H1 2025 alone, seven portfolio companies were fully or partially written down, even as three were revalued higher.

Second, concentrated ownership. As of the last Rule 26 filing, 63.66% of TMT shares are not in public hands. Founders and insiders control a large majority of voting rights between them. That's not inherently negative - it means the people who know the portfolio best own the most of it - but it also means float liquidity is thin, and the public market trades on very low volume (average daily volume around 36,000 shares).

Third, the track record is lumpy. TMT's inception-to-date IRR of 14% per annum through December 2025 is solid for a venture vehicle, but the returns have been driven disproportionately by a handful of hits - Bolt, Scale AI, Pipedrive (sold for $41 million in 2020). The portfolio has suffered notable misses alongside the winners, and the write-down discipline in H1 2025 shows that not every early-stage bet works out.

Is this a falling knife or a falling opportunity?

I think the risk/reward has tilted to the opportunity side, though the timing isn't urgent.

The 52% discount to NAV is extreme even for an illiquid VC vehicle. Management's persistent buyback activity at US$2.65 per share - well below NAV and below the current US$3.40 price - establishes a de facto floor. If the market drops further, the buybacks create mechanical support. If NAV continues its upward trajectory, the discount narrows and the stock re-rates from both sides: higher NAV and a compressing discount.

The core thesis here is that TMT is trading as a generic AIM micro-cap rather than as a portfolio of real companies whose combined value more than triples the market cap. The Bolt-plus-Backblaze anchor alone makes that absurd. The ongoing buybacks make it actively self-correcting.

I'm upgrading TMT to a Buy. The entry thesis is simple: the stock is arguably dirt cheap versus what the portfolio is worth, management is buying at a deeper discount, and the upcoming interim results should provide fresh NAV data that either confirms or challenges the trajectory.

The risk trigger is straightforward. I would reassess if NAV per share contracts below US$6.00 on write-downs across multiple large portfolio holdings, or if the buyback programme pauses while the discount widens further. Those would signal that management's conviction has also cracked.

Until then, investors waiting for an asymmetric entry into a diversified venture portfolio shouldn't let this mispricing go to waste.

Rating: Upgrade to Buy