Chrysalis shares plunge amid tech sell-off frenzy

Investment trust Chrysalis saw its share price plunge in the first half of the year after its tech heavy portfolio was battered by soaring inflation and a sharp fall in valuations.

In its interim results today, the London listed trust said that its net asset value per share had fallen 16 per cent from 251.96p to 211.76p in the six months to March, while its share price fell by over a third, “driven by weakening valuations of listed peers in the tech space”, the firm said.

Shares have continued to slide since and have fallen by a further 40 per cent since the end of March. 

Bosses at Chrysalis said the tech firms in its portfolio were now shifting their focus to profits against a backdrop of soaring inflation.

“Profitability, not growth at any cost, is now the focus as companies look to extend funding runways,” co-portfolio managers Nick Williamson and Richard Watts said. 

“Chrysalis’ portfolio companies have not been immune to this environment, although for our profitable companies, or those with very strong balance sheets, the difficult funding market is of less or no concern.”

The firm’s total net assets also tumbled 8.6 per cent in value in the first six months of the year from £1.38bn to £1.2bn.

Around 40 per cent of the portfolio is “already profitable”, Chrysalis said, including its stake in digital challenger bank Starling. 

Buy-now pay-later giant Klarna, which accounts for around 19 per cent of its portfolio, has also indicated recently it is accelerating a push towards profit and tapering back its growth for the time being.

Chrysalis said it has been working with the unprofitable companies its portfolio to refine funding plans, with bosses ready to draw on cash reserves of £55m to extend cash runways “substantially”.

Bosses said they would now be pulling back from new investments and supporting its existing portfolio as the “challenging environment” persists.

Watts and Williamson made headlines in January as they were revealed to have pocketed over £60m in newly issued Chrysalis shares after a bumper year in 2021.