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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

  Investment Company Act file number: 811-00041  
     
  GENERAL AMERICAN INVESTORS COMPANY, INC.  
  (Exact name of registrant as specified in charter)  
     
  530 Fifth Avenue, 26th Floor, New York, New York 10036  
  (Address of principal executive offices) (Zip code)  

 

Eugene S. Stark

General American Investors Company, Inc.

530 Fifth Avenue

26th Floor

New York, New York 10036

(Name and address of agent for service)

 

Copy to:

William G. Farrar, Esq.

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

 

 

Registrant's telephone number, including area code: 212-916-8400

 

Date of fiscal year end: December 31

 

Date of reporting period: June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

Item 1. Reports to Stockholders.

TO THE STOCKHOLDERS

 

F

or the six months ended June 30, 2024, return as measured based upon net asset value (NAV) per common share, including reinvestment of dividends and distributions, was 15.74% while the investment return to our stockholders (based upon market price per share), also including reinvestment of dividends and distributions, was 15.76%. By comparison, the return for our benchmark, the Standard and Poor’s 500 Stock Index (including income), was 15.29% during this period. For the twelve months ended June 30, 2024, return on net asset value was 26.58% and return to our stockholders was 26.62% which compares to the return of the S&P 500 Stock Index of 24.56%. During both time periods, the discount at which our shares traded continued to fluctuate and on June 30, 2024 it was 17.33%.

As detailed in the accompanying financial statements (unaudited), as of June 30, 2024, the net assets applicable to the Company’s Common Stock were $1,402,088,131 equal to $60.14 per Common Share.

The increase in net assets resulting from operations for the six months ended June 30, 2024 was $188,374,977. During this period, the net realized gain on investments was $63,826,470 and the increase in net unrealized appreciation was $124,461,335. Net investment income for the six months was $5,740,826. Distributions to preferred shareholders amounted to $5,653,654. During the six months, the Company also repurchased 418,501 of its shares at a cost of $19,318,784, an average discount to net asset value of 18.0%.

In the first half of 2024, the S&P 500 recorded strong returns. As in 2023, they have been mainly driven by a few large growth stocks and select corporate equities. The index’s performance was due to outsized returns for seven companies, with the remaining 493 either down year-to-date or with modest gains. Recently, interest rates have stabilized as the U.S. and other economies have experienced up to three consecutive favorable Consumer Price Index reports. At the beginning of the year, there were expectations of 4-5 rate cuts by the Federal Reserve, but now the focus of the equity and bond markets has shifted to hopes for 1-2 cuts late in the third or fourth quarters.

Overall, the performance of equities suggests that the Federal Reserve has achieved its goal of controlling inflation and slowing economic growth for a soft landing. It now seems likely, however, that rate cuts may be necessary soon if the economy weakens at an accelerating pace. Unemployment, which is still historically low, has started to rise and is now above 4%. Job openings are decreasing rapidly, and GDP estimates continue to fall as some government reports have negative revisions, common during economic slowdowns that can lead to recessions. On the other hand, despite monetary restraint, fiscal policies, including the Infrastructure Act and Chips

Act, are contributing to growth. Consumer spending has remained stronger than expected buoyed by interest payments to savers who have nearly $5 trillion in money market accounts as well as inflation-adjusted wage growth.

The rally in the equity markets seems driven mainly by multiple expansion owing to expectations of lower interest rates with revenue growth and expanding margins believed to surely follow. Equities, already near all-time highs, however, may be overvalued without substantial future economic growth or sizable interest rate declines. Europe seems better positioned for growth but its second-largest trading partner, China, faces ongoing challenges that may affect trade. Moreover, China’s support for Russia in its war with Ukraine may lead to additional constraints. Considering the uncertainty from multiple elections in Western nations, with populists leading the polls, ongoing wars, and the potential for expansion to other states, equities’ strong first half performance is particularly noteworthy.

We remain sanguine about the long-term performance of equities but are wary of the risks in this environment and remain watchful. The probability of negative surprises seems higher than usual. Interest rate declines are certainly favorable and make equities appear more attractive. Still, given fiscal imbalances in the U.S. and elsewhere, it seems a policy-neutral interest rate may be higher than that experienced prior to the pandemic. Thus, the impetus for equities’ improved performance from here seems less palpable.

Mr. Andrew V. Vindigni, an employee of the Company for the last thirty-six years and Senior Vice-President since 2006, retired during the second quarter of 2024. The Company expresses its sincere appreciation to Mr. Vindigni for his many years of service and contributions to the Company.

Prospectively, the Company will discontinue preparation and distribution of first and third quarter shareholder reports. Information about the Company, including our investment objectives, operating policies and procedures, investment results, significant portfolio holdings, record of dividend and distribution payments, financial reports, press releases, etc., will continue to be provided on our website which has been updated through June 30, 2024. It can be accessed on the internet at www.generalamericaninvestors.com.

By Order of the Board of Directors,

General American Investors Company, Inc.

Jeffrey W. Priest
President and Chief Executive Officer

July 24, 2024

STATEMENT OF INVESTMENTS June 30, 2024 (Unaudited)

General American Investors

2

 

 

 

Shares

 

Common Stocks

 

 

Value
(Note 1a)

Communication

Services

(8.8%)

Media and Entertainment (6.9%)

419,923

Alphabet Inc. - Class C

$77,022,277

1,333,704

Angi Inc. - Class A (a)

2,560,712

 

22,000

Meta Platforms, Inc. - Class A

11,092,840

 

56,478

The Walt Disney Company

5,607,700

 

(Cost $28,320,614)

96,283,529

 

Telecommunication Services (1.9%)

 

906,602

AT&T Inc.

17,325,164

 

274,199

GCI Liberty, Inc. Escrow (a)

 

50,000

T-Mobile US, Inc.

8,809,000

 

(Cost $21,017,578)

26,134,164

 

(Cost $49,338,192)

122,417,693

 

Consumer

Discretionary

(10.1%)

Automobiles and Components (0.5%)

557,913

Ford Motor Company

(Cost $7,139,755)

6,996,229

 

Consumer Services (1.5%)

 

173,157

Expedia Group, Inc. (a)

(Cost $19,509,499)

21,816,050

 

 

Distribution and Retail (8.1%)

 

286,000

Amazon.com, Inc. (a)

55,269,500

 

525,092

The TJX Companies, Inc.

57,812,629

 

(Cost $12,034,026)

113,082,129

 

(Cost $38,683,280)

141,894,408

 

Consumer

Staples

(8.5%)

Distribution and Retail (2.5%)

42,000

Costco Wholesale Corporation

(Cost $1,269,190)

35,699,580

 

Food, Beverage and Tobacco (4.3%)

 

325,000

Nestlé S.A. (Switzerland)

33,178,251

 

160,000

PepsiCo, Inc.

26,388,800

 

(Cost $18,526,343)

59,567,051

 

Household and Personal Products (1.7%)

 

443,135

Unilever PLC (Netherlands/United Kingdom)

(Cost $12,716,856)

24,336,239

 

(Cost $32,512,389)

119,602,870

 

Energy

(6.1%)

504,230

Cameco Corporation (Canada)

24,808,116

81,991

Chevron Corporation

12,825,032

 

1,020,030

Energy Transfer LP

16,544,887

 

93,100

Exxon Mobil Corporation

10,717,672

 

1,173,370

Gulf Coast Ultra Deep Royalty Trust

14,726

 

650,000

Transocean Ltd. (Switzerland ) (a)

3,477,500

 

234,556

Valaris Limited (Bermuda) (a)

17,474,422

 

(Cost $49,601,450)

85,862,355

 

Financials

(19.0%)

Banks (2.2%)

80,000

JPMorgan Chase & Co.

16,180,800

 

101,100

M&T Bank Corporation

15,302,496

 

(Cost $3,337,828)

31,483,296

 

Financial Services (6.6%)

 

110

Berkshire Hathaway Inc. - Class A (a)(b)

67,346,510

 

243,415

Nelnet, Inc. - Class A

24,550,837

 

(Cost $2,968,650)

91,897,347

3

 

STATEMENT OF INVESTMENTS June 30, 2024 (Unaudited) - continued

General American Investors

 

 

Shares

 

COMMON STOCKS (continued)

 

 

Value
(Note 1a)

Financials

(19.0%)
(continued)

Insurance (10.2%)

660,249

Arch Capital Group Ltd. (a) (Bermuda)

$66,612,522

133,624

Axis Capital Holdings Limited (Bermuda)

9,440,535

 

134,686

Everest Group, Ltd. (Bermuda)

51,318,060

 

220,327

MetLife, Inc.

15,464,752

 

(Cost $23,981,319)

142,835,869

 

(Cost $30,287,797)

266,216,512

 

Health Care

(10.8%)

Equipment and Services (2.5%)

20,000

The Cigna Group

6,611,400

 

37,000

Humana Inc.

13,825,050

 

200,434

iCAD, Inc. (a)

260,564

 

106,601

Tenet Healthcare Corporation (a)

14,181,131

 

(Cost $25,413,422)

34,878,145

 

 

Pharmaceuticals, Biotechnology and Life Sciences (8.3%)

 

25,000

Amgen Inc.

7,811,250

 

50,010

Danaher Corporation

12,494,999

 

119,900

Gilead Sciences, Inc.

8,226,339

 

261,780

Intra-Cellular Therapies, Inc. (a)

17,929,312

 

204,326

Merck & Co., Inc.

25,295,559

 

425,808

Pfizer Inc.

11,914,108

 

294,350

Quantum-Si Incorporated - Class A (a)

309,068

 

14,576

Regeneron Pharmaceuticals, Inc. (a)

15,319,813

 

746,646

SIGA Technologies, Inc.

5,667,043

 

328,179

Stevanato Group S.p.A. (Italy)

6,018,803

 

827,180

Valneva SE (a) (France)

2,820,606

 

354,361

Valneva SE ADR (a) (France)

2,604,553

 

(Cost $75,088,303)

116,411,453

 

(Cost $100,501,725)

151,289,598

 

Industrials

(10.4%)

Capital Goods (3.9%)

874,008

BAE Systems plc (United Kingdom)

14,583,796

 

55,000

GE Vernova Inc. (a)

9,433,050

 

60,785

L3Harris Technologies, Inc.

13,651,095

 

165,000

RTX Corporation

16,564,350

 

(Cost $38,050,243)

54,232,291

 

Commercial and Professional Services (6.0%)

 

435,625

Republic Services, Inc.

(Cost $6,049,298)

84,659,363

 

 

Transportation (0.5%)

 

100,000

Uber Technologies, Inc. (a)

(Cost $6,485,280)

7,268,000

 

(Cost $50,584,821)

146,159,654

 

Information

Technology

(25.6%)

Semiconductors and Semiconductor Equipment (10.3%)

433,364

AIXTRON SE (Germany)

8,509,482

61,652

Applied Materials, Inc.

14,549,255

 

66,100

ASML Holding N.V. (Netherlands)

67,602,453

 

21,500

Broadcom Inc.

34,518,895

 

919,465

indie Semiconductor, Inc. - Class A (a)

5,673,099

 

65,009

Universal Display Corporation

13,668,142

 

(Cost $30,224,404)

144,521,326

4

 

STATEMENT OF INVESTMENTS June 30, 2024 (Unaudited) - continued

General American Investors

(see notes to unaudited financial statements)

 

 

Shares

 

COMMON STOCKS (continued)

 

 

Value
(Note 1a)

Information

Technology

(25.6%)
(continued)

Software and Services (10.1%)

28,500

Adobe Inc. (a)

$15,832,890

205,000

Microsoft Corporation

91,624,750

1,667,579

NextNav Inc. (a)

13,524,066

 

41,381

Tyler Technologies, Inc. (a)

20,805,539

 

(Cost $36,511,204)

141,787,245

 

Technology, Hardware and Equipment (5.2%)

 

316,000

Apple Inc.

66,555,920

 

138,260

Cisco Systems, Inc.

6,568,733

 

(Cost $4,002,006)

73,124,653

 

(Cost $70,737,614)

359,433,224

 

Materials

(4.6%)

485,000

Agnico Eagle Mines Limited (Canada)

31,719,000

832,438

Alamos Gold Inc. - Class A (Canada)

13,052,628

 

816,056

Algoma Steel Group Inc. (Canada)

5,679,750

 

243,593

Cleveland-Cliffs Inc. (a)

3,748,896

 

957,591

Ferroglobe PLC (United Kingdom) (a)

5,132,688

 

125,201

Newmont Corporation

5,242,166

 

(Cost $52,282,389)

64,575,128

 

Utilities

(1.0%)

290,000

Dominion Energy, Inc.

(Cost $14,065,950)

14,210,000

 

Miscellaneous

(0.6%)

2,472,044

Other (c)

(Cost $7,268,510)

7,649,778

 

TOTAL COMMON STOCKS (105.5%)

(Cost $495,864,117)

1,479,311,220

 

 

PURCHASED OPTIONS (a)

Puts

 

Contracts
(100 shares each)

 

Company/Expiration Date/Exercise Price/Notional

Software

and Services

500

Microsoft Corporation/July 19, 2024/

$430/$21,500,000

(Cost $167,198)

53,000

 

 

Technology,

Hardware

and Equipment

500

Apple Inc./October 18, 2024/$205/$10,250,000

(Cost $266,278)

210,000

TOTAL PURCHASED OPTIONS (0.0%)

(Cost $433,476)

263,000

 

5

 

STATEMENT OF INVESTMENTS June 30, 2024 (Unaudited) - continued

General American Investors

(see notes to unaudited financial statements)

 

 

Principal

 

SHORT-TERM SECURITIES

 

 

Value
(Note 1a)

 

U.S. Treasury Bills

 

$25,000,000

Due August 22, 2024, 5.10% (d)

$24,815,833

 

17,000,000

Due October 31, 2024, 5.157% (d)

16,701,574

 

10,000,000

Due October 31, 2024, 5.17% (d)

9,824,456

 

(Cost $51,343,527)

51,341,863

 

 

 

Shares

 

 

 

 

 

 

64,711,030

State Street Institutional Treasury Plus
Money Market Fund, Trust Class, 5.19% (e)

(Cost $64,711,030)

64,711,030

 

 

TOTAL SHORT-TERM SECURITIES (8.3%)

(Cost $116,054,557)

116,052,893

 

Total Investments (f) (113.8%)

(Cost $612,352,150)

1,595,627,113

Liabilities in Excess of Other Assets (-0.2%)

(3,500,157

)

 

1,592,126,956

Preferred Stock (-13.6%)

(190,038,825

)

Net Assets Applicable To Common Stock (100%)

$1,402,088,131

ADR - American Depository Receipt

(a)Non-income producing security.

(b)50 shares of 110 total shares held as collateral for options written.

(c)Securities which have been held for less than one year, not previously disclosed, and not restricted.

(d)Yield to maturity at purchase.

(e)7-day yield.

(f)At June 30, 2024, the cost of investments and derivatives for Federal income tax purposes was $609,254,552; aggregate gross unrealized appreciation was $997,641,659;

        aggregate gross unrealized depreciation was $11,269,098; and net unrealized appreciation was $986,372,561.

6

 

MAJOR STOCK CHANGES (a): Three Months Ended June 30, 2024 (Unaudited)

General American Investors

(see notes to unaudited financial statements)

Increases

 

Net Shares Transacted

 

Shares Held

New Positions

 

Ford Motor Company

557,913

557,913

 

GE Vernova Inc.

55,000

55,000

 

L3Harris Technologies, Inc.

60,785

60,785

 

Newmont Corporation

10,000

125,201

(b)

 

Transocean Ltd.

50,000

650,000

(b)

 

Uber Technologies, Inc.

100,000

100,000

 

Additions

 

Dominion Energy, Inc.

30,000

290,000

 

Everest Group, Ltd.

5,490

134,686

 

indie Semiconductor, Inc. - Class A

224,570

919,465

 

Intra-Cellular Therapies, Inc.

1,341

261,780

 

NextNav Inc.

664

1,667,579

 

Pfizer Inc.

60,000

425,808

 

SIGA Technologies, Inc.

4,919

746,646

 

Stevanato Group S.p.A.

28,179

328,179

 

Tyler Technologies, Inc.

5,000

41,381

 

Valaris Limited

98,450

234,556

 

Valneva SE

479,187

827,180

 

Decreases

Eliminations

 

Eaton Corporation plc

40,500

 

General Motors Company

150,000

 

Medtronic plc

107,403

 

Reductions

 

Adobe Inc.

1,500

28,500

 

Agnico Eagle Mines Limited

53,858

485,000

 

Alamos Gold Inc. - Class A

100,000

832,438

 

Alphabet Inc. - Class C

25,000

419,923

 

Apple Inc.

35,000

316,000

 

Arch Capital Group Ltd.

15,000

660,249

 

ASML Holding N.V.

3,500

66,100

 

Axis Capital Holdings Limited

20,000

133,624

 

Broadcom Inc.

2,000

21,500

 

Costco Wholesale Corporation

5,000

42,000

 

Ferroglobe PLC

100,000

957,591

 

M&T Bank Corporation

23,900

101,100

 

Republic Services, Inc.

13,272

435,625

 

Tenet Healthcare Corporation

3,399

106,601

(a)Common shares unless otherwise noted.

(b)Shares purchased in prior period and previously carried under Common Stocks - Miscellaneous - Other.

7

 

PORTFOLIO DIVERSIFICATION June 30, 2024 (Unaudited)

General American Investors

(see notes to unaudited financial statements)

The diversification of the Company’s net assets applicable to its Common Stock by industry group as of June 30, 2024 is shown in the table.

Industry Category 

 

Cost (000)

 

Value (000)

 

Percent Common Net Assets*

Information Technology

 

Semiconductors & Semiconductor Equipment

$30,224

$144,521

10.3

%

 

Software & Services

36,679

141,840

10.1

 

Technology, Hardware & Equipment

4,268

73,335

5.2

 

71,171

359,696

25.6

Financials

 

Banks

3,338

31,483

2.2

 

Financial Services

2,969

91,897

6.6

 

Insurance

23,981

142,836

10.2

 

30,288

266,216

19.0

Health Care 

 

Equipment & Services

25,414

34,878

2.5

 

Pharmaceuticals, Biotechnology & Life Sciences

75,088

116,412

8.3

 

100,502

151,290

10.8

Industrials

 

Capital Goods

38,050

54,232

3.9

 

Commercial & Professional Services

6,050

84,660

6.0

 

Transportation

6,485

7,268

0.5

 

50,585

146,160

10.4

Consumer Discretionary

 

Automobiles & Components

7,140

6,996

0.5

 

Consumer Services

19,509

21,816

1.5

 

Distribution & Retail

12,034

113,082

8.1

 

38,683

141,894

10.1

Communication Services

 

Media & Entertainment

28,321

96,284

6.9

 

Telecommunication Services

21,017

26,134

1.9

 

49,338

122,418

8.8

Consumer Staples

 

Distribution & Retail

1,269

35,700

2.5

 

Food, Beverage & Tobacco

18,526

59,567

4.3

 

Household & Personal Products

12,717

24,336

1.7

 

32,512

119,603

8.5

 

Energy

49,601

85,862

6.1

Materials

52,282

64,575

4.6

Utilities

14,066

14,210

1.0

Miscellaneous**

7,269

7,650

0.6

 

496,297

1,479,574

105.5

Short-Term Securities

116,055

116,053

8.3

Total Investments

$612,352

1,595,627

113.8

Liabilities in Excess of Other Assets

(3,500

)

(0.2

)

Preferred Stock

(190,039

)

(13.6

)

Net Assets Applicable to Common Stock

$1,402,088

100.0

%

*Net Assets applicable to the Company’s Common Stock.

**Securities which have been held for less than one year, not previously disclosed, and not restricted.

8

 

STATEMENT OF ASSETS AND LIABILITIES June 30, 2024 (Unaudited)

General American Investors

(see notes to unaudited financial statements)

Assets

INVESTMENTS, AT VALUE (NOTE 1a)

 

Common stocks (cost $495,864,117)

$1,479,311,220

 

Purchased options (cost $433,476; note 4)

263,000

 

U.S. Treasury bills (cost $51,343,527)

51,341,863

 

Money market fund (cost $64,711,030)

64,711,030

 

 

Total investments (cost $612,352,150)

1,595,627,113

 

OTHER ASSETS

 

Dividends, interest and other receivables

$1,459,753

 

Present value of future office lease payments (note 8)

2,694,347

 

Qualified pension plan asset, net excess funded (note 7)

9,908,143

 

Prepaid expenses, fixed assets, and other assets

568,128

14,630,371

 

TOTAL ASSETS

1,610,257,484

 

Liabilities

 

Payable for securities purchased

1,091,914

 

Accrued compensation payable to officers and employees

2,460,565

 

Accrued Preferred Stock dividend not yet declared

185,366

 

Present value of future office lease payments (note 8)

2,694,347

 

Accrued supplemental pension plan liability (note 7)

5,069,988

 

Accrued supplemental thrift plan liability (note 7)

6,220,296

 

Accrued expenses and other liabilities

408,052

 

TOTAL LIABILITIES

18,130,528

 

5.95% CUMULATIVE PREFERRED STOCK, SERIES B -

 

7,601,553 shares at a liquidation value of $25 per share (note 5)

190,038,825

 

NET ASSETS APPLICABLE TO COMMON STOCK - 23,313,823 shares (note 5)

$1,402,088,131

 

NET ASSET VALUE PER COMMON SHARE

$60.14

 

Net Assets Applicable to Common Stock

 

Common Stock, 23,313,823 shares at $1 par value per share (note 5)

$23,313,823

 

Additional paid-in capital (note 5)

329,018,248

 

Unallocated distributions on Preferred Stock

(5,839,021

)

 

Total distributable earnings (note 5)

1,054,067,750

 

Accumulated other comprehensive income (note 7)

1,527,331

 

NET ASSETS APPLICABLE TO COMMON STOCK

$1,402,088,131

9

 

STATEMENT OF OPERATIONS Six Months Ended June 30, 2024 (Unaudited)

General American Investors

(see notes to unaudited financial statements)

Income

 

Dividends (net of foreign withholding taxes of $302,712)

$9,993,848

 

Interest

3,319,928

 

13,313,776

 

Expenses

 

Investment research

$4,656,503

 

Administration and operations

1,753,720

 

Office space and general

517,191

 

Transfer agent, custodian, and registrar fees and expenses

179,461

 

Auditing and legal fees

172,836

 

Directors’ fees and expenses

137,665

 

State and local taxes

94,908

 

Stockholders’ meeting and reports

60,666

7,572,950

 

NET INVESTMENT INCOME

5,740,826

 

Net Realized Gain and Change in Unrealized Appreciation on Investments (Notes 1, 3 and 4)

 

Net realized gain (loss) on investments:

 

Common stocks

64,806,312

 

Purchased options

(1,099,489

)

 

Written options

119,232

 

Foreign currency transactions

415

 

63,826,470

 

Net increase (decrease) in unrealized appreciation:

 

Common stocks

124,661,335

 

Purchased options

(141,463

)

 

Written options

(2,262

)

 

Short-term securities and other

(56,275

)

 

124,461,335

GAINS AND APPRECIATION ON INVESTMENTS

188,287,805

NET INVESTMENT INCOME, GAINS, AND APPRECIATION ON INVESTMENTS

194,028,631

DISTRIBUTIONS TO PREFERRED STOCKHOLDERS

(5,653,654

)

INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

$188,374,977

STATEMENTS OF CHANGES IN NET ASSETS

Operations

Six Months Ended June 30, 2024 (Unaudited)

Year Ended December 31, 2023

 

Net investment income

$5,740,826

$10,577,329

 

Net realized gain on investments

63,826,470

63,572,043

 

Net increase in unrealized appreciation

124,461,335

199,254,426

 

194,028,631

273,403,798

 

Distributions to Preferred Stockholders

(5,653,654

)

(11,310,806

)

INCREASE IN NET ASSETS RESULTING FROM OPERATIONS

188,374,977

262,092,992

 

Other Comprehensive Income - Funded Status of Defined Benefit Plans (Note 7)

1,132,335

 

Distributions to Common Stockholders

(61,945,377

)

 

Capital Share Transactions (Note 5)

 

Value of Common Shares issued in payment of dividends and distributions

22,472,914

 

Cost of Common Shares purchased

(19,318,784

)

(31,882,976

)

 

Benefit to common shareholders resulting from preferred shares purchased

2,405

DECREASE IN NET ASSETS - CAPITAL SHARE TRANSACTIONS

(19,318,784

)

(9,407,657

)

 

NET INCREASE IN NET ASSETS

169,056,193

191,872,293

 

Net Assets Applicable to Common Stock

BEGINNING OF PERIOD

1,233,031,938

1,041,159,645

 

END OF PERIOD

$1,402,088,131

$1,233,031,938

10

 

FINANCIAL HIGHLIGHTS

General American Investors

(see notes to unaudited financial statements)

The following table shows per share operating performance data, total investment return, ratios, and supplemental data for the six months ended June 30, 2024 and for each year in the five-year period ended December 31, 2023. This information has been derived from information contained in the financial statements and market price data for the Company’s shares.

 

Six Months Ended
June 30, 2024 (unaudited)

Year Ended December 31,

 

2023

2022

2021

2020

2019

PER SHARE OPERATING PERFORMANCE

 

Net asset value, beginning of period

$51.96

$43.42

$52.59

$44.00

$43.70

$34.51

 

Net investment income

0.25

0.44

0.22

0.02

0.13

0.33

 

Net gain (loss) on common stocks, options and other-realized and unrealized

8.17

11.18

(7.38

)

12.14

3.10

11.78

 

Other comprehensive income (loss)

0.05

(0.04

)

0.20

0.03

(0.01

)

 

8.42

11.67

(7.20

)

12.36

3.26

12.10

 

Distributions on Preferred Stock:

 

Dividends from net investment income

(0.12

)

(0.07

)

(0.06

)

(0.03

)

(0.07

)

 

Distributions from net capital gains

(0.36

)

(0.40

)

(0.41

)

(0.43

)

(0.39

)

 

Unallocated

(0.24

)

 

(0.24

)

(0.48

)

(0.47

)

(0.47

)

(0.46

)

(0.46

)

 

Total from investment operations

8.18

11.19

(7.67

)

11.89

2.80

11.64

 

Distributions on Common Stock:

 

Dividends from net investment income

(0.64

)

(0.14

)

(0.46

)

(0.15

)

(0.39

)

 

Distributions from net capital gains

(2.01

)

(1.36

)

(2.84

)

(2.35

)

(2.06

)

 

(2.65

)

(1.50

)

(3.30

)

(2.50

)

(2.45

)

 

Net asset value, end of period

$60.14

$51.96

$43.42

$52.59

$44.00

$43.70

 

Per share market value, end of period

$49.72

$42.95

$36.15

$44.20

$37.19

$37.74

 

TOTAL INVESTMENT RETURN -

 

Stockholder return, based on market price per share

15.76

%*

26.23

%

(14.92

)%

28.16

%

5.23

%

41.54

%

RATIOS AND SUPPLEMENTAL DATA

 

Net assets applicable to Common Stock
end of period (000’s omitted)

$1,402,088

$1,233,032

$1,041,160

$1,282,789

$1,087,971

$1,081,698

 

Ratio of expenses to average net assets applicable to Common Stock

1.15

%**

1.35

%

1.13

%

1.24

%

1.22

%

1.28

%

 

Ratio of net income to average net assets applicable to Common Stock

0.87

%**

0.92

%

0.50

%

0.05

%

0.32

%

0.81

%

 

Portfolio turnover rate

12.88

%*

15.09

%

16.53

%

24.74

%

19.33

%

17.76

%

 

PREFERRED STOCK

 

Liquidation value, end of period
(000’s omitted)

$190,039

$190,039

$190,117

$190,117

$190,117

$190,117

 

Asset coverage

838

%

749

%

648

%

775

%

672

%

669

%

 

Asset coverage per share

$209.45

$187.21

$161.91

$193.68

$168.07

$167.24

 

Liquidation preference per share

$25.00

$25.00

$25.00

$25.00

$25.00

$25.00

 

Market value per share

$24.84

$24.98

$25.50

$26.86

$27.50

$27.60

*Not annualized

** Annualized

11

 

NOTES TO FINANCIAL STATEMENTS (Unaudited)

General American Investors

1. Significant Accounting Policies and Other Matters – General American Investors Company, Inc. (the “Company”), established in 1927, is registered under the Investment Company Act of 1940 as a closed-end, diversified management investment company. It is internally managed by its officers under the direction of the Board of Directors.

The accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) pursuant to the requirements for reporting; Accounting Standards Codification 946, Financial Services – Investment Companies (“ASC 946”), and Regulation S-X.

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income, expenses, and gains and losses during the reported period. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ, and these differences could be material.

a. Security ValuationEquity securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the period. Equity securities reported on the NASDAQ national market are valued at the official closing price on that day. Listed and NASDAQ equity securities for which no sales are reported on that day and other securities traded in the over-the-counter market are valued at the last bid price (asked price for options written) on the valuation date. Equity securities traded primarily in foreign markets are valued at the closing price of such securities on their respective exchanges or markets. Corporate debt, domestic and foreign, and U.S. government securities are generally traded in the over-the-counter market rather than on a national securities exchange. The Company utilizes the latest bid prices furnished by independent pricing services with respect to transactions in such securities to determine current market value if maturity date exceeds 60 days. Investments in such securities maturing within 60 days or less are valued at amortized cost. If, after the close of foreign markets, conditions change significantly, the price of certain foreign securities may be adjusted to reflect fair value as of the time of the valuation of the portfolio. Investments in money market funds are valued at their net asset value.

b. OptionsThe Company may purchase and write (sell) exchange traded put and call options on equity securities. The Company purchases put options or writes call options to hedge the value of portfolio investments while it purchases call options and writes put options to obtain market exposure. The risk associated with purchasing an option is that the Company pays a premium whether or not the option is exercised. Additionally, the Company bears the risk of loss of the premium and a change in market value should the counterparty not perform under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. Premiums received from writing options are reported as a liability on the Statement of Assets and Liabilities. Those that expire unexercised are treated by the Company on the expiration date as realized gains on written option transactions in the Statement of Operations. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss on written option transactions in the Statement of Operations. If a written call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Company has realized a gain or loss on investments in the Statement of Operations. If a written put option is exercised, the premium reduces the cost basis of the securities purchased by the Company and is parenthetically disclosed on the Statement of Assets and Liabilities. The Company as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. For exchange traded options purchased, the Company bears the risk of loss in the amount of the premiums paid plus appreciation in market value should a counterparty fail to perform under the contract. Options written by the Company do not give rise to counterparty risk as options written obligate the Company to perform. The Company has not entered into a master netting agreement with respect to options on equity securities. See Note 4 for option information.

c. Security Transactions and Investment IncomeSecurity transactions are recorded as of the trade date. Realized gains and losses are determined on the specific identification method. Dividend income and distributions to stockholders are recorded as of the ex-dividend dates. Interest income is recognized daily on the accrual basis, adjusted for the accretion of discounts and amortization of premiums.

d. Foreign Currency Translation and TransactionsPortfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the exchange rate of such currencies versus U.S. dollars on the date of valuation. Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction

12

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued

General American Investors

1. Significant Accounting Policies and Other Matters – (Continued from bottom of previous page.)

date. Events may impact the availability or reliability of foreign exchange rates used to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using procedures established and approved by the Company’s Board of Directors. The Company does not separately report the effect of changes in foreign exchange rates from changes in market prices on securities held. These changes are combined and included in net realized and unrealized gain or loss on the Statement of Operations.

Realized foreign exchange gains or losses may also arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses may also arise from changes in foreign exchange rates on foreign currency denominated assets and liabilities other than investments in securities held at the end of the reporting period.

Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. companies as a result of, among other factors, the possibility of political or economic instability or the level of governmental supervision and regulation of foreign securities markets.

e. Dividends and DistributionsThe Company expects to pay dividends of net investment income and distributions of net realized capital and currency gains, if any, annually to common shareholders and quarterly to preferred shareholders. Dividends and distributions to common and preferred shareholders, which are determined in accordance with Federal income tax regulations, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified to paid-in capital as they arise.

f. Federal Income TaxesThe Company’s policy is to fulfill the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all taxable income to its stockholders. Accordingly, no provision for Federal income taxes is required. In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Company’s tax positions taken or expected to be taken on Federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Company’s financial statements.

g. IndemnificationsIn the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications. The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses pursuant to these indemnification provisions and expects any future risk of loss thereunder to be remote.

2. Fair Value Measurements – Various data inputs are used in determining the value of the Company’s investments. These inputs are summarized in a hierarchy consisting of the three broad levels listed below:

Level 1 - quoted prices in active markets for identical securities (including money market funds which are valued at net asset value, typically $1 per share),

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, etc.), and

Level 3 - significant unobservable inputs (including assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. No transfers among levels occurred during the six months ended June 30, 2024. The following is a summary of the inputs used to value the Company’s net assets as of June 30, 2024:

Assets

Level 1

Level 2

Level 3

Total

Common stocks

$1,479,311,220

$1,479,311,220

Purchased options

263,000

263,000

U.S. Treasury bills

$51,341,863

51,341,863

Money market fund

64,711,030

64,711,030

Total

$1,544,285,250

$51,341,863

$1,595,627,113

3. Purchases and Sales of Securities – Purchases and sales of securities (other than short-term securities and options) for the six months ended June 30, 2024 amounted to $177,764,370 and $177,756,929, on long transactions, respectively.

13

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued

General American Investors

4. Options – In order to enhance financial statement disclosure for derivative instruments, the following table is intended to enable investors to understand: a) how and why the Company uses purchased and written options on equity securities, b) how purchased and written options on equity securities are accounted for, and c) how purchased and written options on equity securities affect the Company’s financial position and results of operations. As of June 30, 2024, the Company has not offset any of the positions and the positions are presented gross on the Statement of Assets and Liabilities.

The following table presents options contracts by location and as presented on the Statement of Assets and Liabilities as of June 30, 2024:

Asset Options

Liability Options

Underlying Risk

Statement of
Assets and Liabilities Location

Fair Value

Statement of
Assets and Liabilities Location

Fair Value

Equity

Purchased options

$263,000

Outstanding
options written,
at value

$

The following table presents the effect of options activity on the Statement of Operations for the six months ended June 30, 2024:

Underlying Risk

Statement
of Operations

Realized
Gain (Loss)
on Options

Change in Unrealized Appreciation
(Depreciation) on Options

Equity

Purchased options

$(1,099,489

)

$(141,463

)

Equity

Written options

119,232

(2,262

)

 

$(980,257

)

$(143,725

)

Average monthly options activity during the six months ended June 30, 2024 was:

 

Purchased Options Contracts

Written Options Contracts

Numbers of Contracts

1,904

434

5. Capital Stock and Dividend Distributions – The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, $1.00 par value, and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock, 23,313,823 shares were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,601,553 were outstanding on June 30, 2024.

On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock, Series B in an underwritten offering. The Preferred Shares were noncallable for the 5 year period ended September 24, 2008 and have a liquidation preference of $25.00 per share plus accumulated and unpaid dividends to the date of redemption. Cumulatively, the Board of Directors has authorized the repurchase of up to 2 million Preferred Shares in the open market at prices below $25.00 per share. To date, 398,447 shares have been repurchased.

The Company allocates distributions from net capital gains and other types of income proportionately among holders of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are not paid from net capital gains, they will be paid from investment company taxable income, or will represent a return of capital.

Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage level of at least 200% of the Preferred Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the Company is required to maintain a certain amount of discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. If the Company fails to meet these requirements and does not cure such failure, the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00 per share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage requirements could restrict the Company’s ability to pay dividends on shares of Common Stock and could lead to sales of portfolio securities at inopportune times.

The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, generally, vote together with the holders of Common Stock as a single class. Holders of Preferred Stock will elect two members to the Company’s Board of Directors and the holders of Preferred and Common Stock, voting as a single class, will elect the remaining directors. If the Company fails to pay dividends on the Preferred Stock in an amount equal to two full years of dividends, the holders of Preferred Stock will have the right to elect a majority of the directors.

 

14

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued

General American Investors

In addition, the Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification as a closed-end investment company or changes in its fundamental investment policies.

The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of net assets applicable to Common Stock in the Statement of Assets and Liabilities.

Transactions in Common Stock during the six months ended June 30, 2024 and the year ended December 31, 2023 were as follows:

 

Shares

Amount

 

2024

2023

2024

2023

Par value of Shares issued in payment of dividends and distributions (issued from treasury)

529,522

$529,522

Increase in paid-in capital

21,943,392

Total increase

529,522

22,472,914

Par value of Shares purchased (at an average discount from net asset value of 18.0% and 17.4%, respectively)

(418,501

)

(776,220

)

$(418,501

)

(776,220

)

Decrease in paid-in capital

(18,900,283

)

(31,106,756

)

Total decrease

(418,501

)

(776,220

)

(19,318,784

)

(31,882,976

)

Net decrease

(418,501

)

(246,698

)

$(19,318,784

)

$(9,410,062

)

At June 30, 2024, the Company held in its treasury 8,667,049 shares of Common Stock with an aggregate cost of $317,508,116.

The tax basis distributions during the year ended December 31, 2023 are as follows: ordinary distributions of $17,749,422 and net capital gains distributions of $55,506,761. As of December 31, 2023, distributable earnings on a tax basis totaled $866,848,562 consisting of $4,926,831 from undistributed net capital gains and $861,921,731 from net unrealized appreciation on investments. A reclassification arising from a permanent “book/tax” difference reflects non-tax deductible expenses during the year ended December 31, 2023. As a result, additional paid-in capital was decreased by $2,132,000 and total distributable earnings were increased by $2,132,000. Net assets were not affected by this reclassification. As of December 31, 2023, the Company had wash sale loss deferrals of $1,991 and straddle loss deferrals of $2,383,643.

6. Officers’ Compensation – The aggregate compensation accrued and paid by the Company during the six months ended June 30, 2024 to its officers (identified on back cover) amounted to $4,003,787.

7. Benefit Plans – The Company has funded (qualified) and unfunded (supplemental) noncontributory defined benefit pension plans that are available to its employees. The pension plans provide defined benefits based on years of service and final average salary with an offset for a portion of social security covered compensation. The components of the net periodic benefit cost (income) of the plans for the six months ended June 30, 2024 were:

Service cost

$189,401

Interest cost

588,690

Expected return on plan assets

(1,024,557

)

Net periodic benefit income

$(246,466

)

The Company recognizes the overfunded status of its defined benefit postretirement plan as an asset in the Statement of Assets and Liabilities and recognizes changes in funded status in the year in which the changes occur through other comprehensive income.

The Company also has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are available to its employees. The aggregate cost of such plans for the six months ended June 30, 2024 was $1,156,724. The qualified thrift plan acquired 8,500 shares in the open market, and distributed to former employees 100,709 shares of the Company’s Common Stock during the six months ended June 30, 2024. It held 569,840 shares of the Company’s Common Stock at June 30, 2024.

5. Capital Stock and Dividend Distributions – (Continued from bottom of previous page.)

15

 

NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued

General American Investors

8. Operating Lease Commitment – The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases, which requires lessees to reassess if a contract is or contains lease agreements and assess the lease classification to determine if they should recognize a right-of-use asset and offsetting liability on the Statement of Assets and Liabilities that arises from entering into a lease, including an operating lease. The right-of-use asset and offsetting liability is reported on the Statement of Assets and Liabilities in line items entitled, “Present value of future office lease payments.” Since the operating lease does not specify an implicit rate, the right-of-use asset and liability have been calculated using a discount rate of 3.0%, which is based upon high quality corporate interest rates for a term equivalent to the lease period as of January 1, 2018. The annual cost of the operating lease continues to be reflected as an expense in the Statements of Operations and Changes in Net Assets.

In 2017, the Company entered into an operating lease agreement for office space which will expire in 2028 and provide for aggregate rental payments of approximately $6,437,500. The lease agreement contains clauses whereby the Company will receive free rent for a specified number of months and credit towards construction of office improvements and incurs escalations annually relating to operating costs and real property taxes and to annual rent charges beginning in 2023. Rental expense approximated $297,100 for the six months ended June 30, 2024. The Company has the option to extend the lease for an additional five years at market rates. As of June 30, 2024, no consideration has been given to extending this lease. Minimum rental commitments under this operating lease are approximately:

2024

$332,000

2025

663,000

2026

663,000

2027

663,000

Thereafter

553,000

Total Remaining Lease Payments

2,874,000

Effect of Present Value Discounting

(179,653

)

Present Value of Future Office Lease Payments

$2,694,347

OTHER MATTERS (Unaudited)

Previous purchases of the Company’s Common and Preferred Stock are set forth in Note 5 on pages 13-14. Prospective purchases of Common and Preferred Stock may be made at such times, at such prices, in such amounts and in such manner as the Board of Directors may deem advisable.

The policies and procedures used by the Company to determine how to vote proxies relating to portfolio securities and the Company’s proxy voting record for the twelve-month period ended June 30, 2023 are available: (1) without charge, upon request, by calling us at our toll-free telephone number (1-800-436-8401), (2) on the Company’s website at www.generalamericaninvestors.com and (3) on the Securities and Exchange Commission’s website at www.sec.gov.

On April 9, 2024, the Company submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Company’s principal executive officer certified that he was not aware, as of that date, of any violation by the Company of the NYSE’s Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Company’s principal executive and principal financial officer made a semi-annual certification, included in a filing with the SEC on Form N-CSR as of December 31, 2023 relating to, among other things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable.

GENERAL AMERICAN INVESTORS
COMPANY, INC.

SEMI-ANNUAL REPORT

June 30, 2024

A Closed-End Investment Company

listed on the New York Stock Exchange

530 FIFTH AVENUE

NEW YORK • NY 10036

212-916-8400 • 1-800-436-8401

E-mail: InvestorRelations@gainv.com

www.generalamericaninvestors.com

DIRECTORS*

Spencer Davidson, Chairman

Arthur G. Altschul, Jr.

Rose P. Lynch

Rodney B. Berens

Jeffrey W. Priest

Clara E. Del Villar

Savannah Sachs

John D. Gordan, III

Henry R. Schirmer

Betsy F. Gotbaum

(*The Company is a stand-alone fund.)

OFFICERS

Jeffrey W. Priest, President and Chief Executive Officer

Anang K. Majmudar, Senior Vice-President

Craig A. Grassi, Vice-President

Liron Kronzon, Vice-President

Sally A. Lynch, Vice-President

Eugene S. Stark, Vice-President, Administration;
Principal Financial Officer & Chief Compliance Officer

Samantha X. Jin, Treasurer

Connie A. Santa Maria, Corporate Secretary

SERVICE COMPANIES

Counsel
Sullivan & Cromwell LLP

Independent Auditors
Ernst & Young LLP

Custodian and
Accounting Agent

State Street Bank and
Trust Company

Transfer Agent and Registrar

Equiniti Trust Company, LLC

48 Wall Street, Floor 23
New York, NY 10005
1-800-413-5499
www.equiniti.com

 

 

 

ITEM 2. CODE OF ETHICS.

 

Not applicable to this semi-annual report.

 

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

 

Not applicable to this semi-annual report.

 

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

 

Not applicable to this semi-annual report.

 

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

 

Not applicable to this semi-annual report.

 

ITEM 6. INVESTMENTS.

 

(a) The schedule of investments in securities of unaffiliated issuers is included as part of the report to stockholders filed under Item 1 of this form.

 

(b) Not applicable.

 

ITEM 7. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

(a) Not applicable.

 

(b) Not applicable.

 

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable.

 

ITEM 9. PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

(1) Not applicable.

 

(2) Not applicable.

 

(3) Not applicable.

 

ITEM 10. REMUNERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES.

 

(1) Not applicable.

 

(2) Not applicable.

 

(3) Not applicable.

 

(4) Not applicable.

 

ITEM 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT.

 

(1) Not applicable.

 

(2) Not applicable.

 

ITEM 12. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

Not applicable to this semi-annual report.

 

ITEM 13. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

 

(a) Not applicable to this semi-annual report.

 

(b) Not applicable.

 

 

 

 

ITEM 14. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

 

(a) General American Investors Company, Inc. Common Stock (GAM)

 

Period
2024
  (a) Total Number
of Shares (or Units)
Purchased
   (b) Average Price
Paid per Share
(or Unit)
   (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs   (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs 
01/01-01/31   74,936   $43.1991    74,936    1,516,092 
02/01-02/29   63,995    44.7704    63,995    1,452,097 
03/01-03/31   8,900    45.1155    8,900    1,443,197 
04/01-04/30   99,371    45.7682    99,371    1,343,826 
05/01-05/31   111,720    47.7163    111,720    1,232,106 
06/01-06/30   59,579    49.2811    59,579    1,172,527 
Total for the period   418,501         418,501      

 

Note- On January 25, 2024, the Board of Directors authorized the repurchase of an additional 1,000,000 shares, of the registrant’s common stock when the shares are trading at a discount from the underlying net asset value of at least 8%.  This represents a continuation of the repurchase program which began in March 1995.  As of the beginning of the period, January 1, 2024, there were 591,028 shares available for repurchase under the aforementioned extension of such authorization.  As of the end of the period, June 30, 2024, there were 1,172,527 shares available for repurchase under this program.

  

 

 

 

 

(b) General American Investors Company, Inc. Preferred Stock (GAMpB)

 

Period 2024 (a) Total Number of shares (or Units) Purchased (b) Average Price Paid per Share (or Unit) (c) Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced
Plans or Programs
(d) Maximum Number
(or Approximate Dollar
Value) of Shares (or
Units) that May Yet Be
Purchased Under the
Plans or Programs
01/01-01/31   1,601,553
02/01-02/29   1,601,553
03/01-03/31   1,601,553
04/01-04/30   1,601,553
05/01-05/31   1,601,553
06/01-06/30   1,601,553
Total for period    

 

Note - The Board of Directors has authorized the repurchase of the registrant's preferred stock when the shares are trading at a price not in excess of $25.00 per share. As of the beginning of the period, January 1, 2024, there were 1,601,553 shares available for repurchase under such authorization. As of the end of the period, June 30, 2024, there were 1,601,553 shares available for repurchase under this program.

 

 

 

 

ITEM 15. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

 

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board of Directors as set forth in the registrant's Proxy Statement, dated February 16, 2024.

 

ITEM 16. CONTROLS AND PROCEDURES.

 

Conclusions of principal officers concerning controls and procedures

 

(a) As of June 30, 2024, an evaluation was performed under the supervision and with the participation of the officers of General American Investors Company, Inc. (the "Registrant"), including the principal executive officer ("PEO") and principal financial officer ("PFO"), to assess the effectiveness of the Registrant's disclosure controls and procedures. Based on that evaluation, the Registrant's officers, including the PEO and PFO, concluded that, as of June 30, 2024, the Registrant's disclosure controls and procedures were reasonably designed so as to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.

 

(b) There have been no significant changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the Registrant’s last fiscal period that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

ITEM 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

 

Not applicable.

 

ITEM 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.

 

(a) Not applicable.

 

(b) Not applicable.

 

ITEM 19. EXHIBITS

 

(a) (1) The code of ethics disclosure required by Item 2 is not applicable to this semi-annual report.

 

  (2) See separate certifications (Exhibit 99 CERT) for each of the principal executive officer and the principal financial officer of the Registrant pursuant to Rule 30a-2(a) under the Investment Company Act of 1940.

 

  (3) Written solicitation to purchase securities is not applicable to this semi-annual report.

 

  (4) Change in independent public accountant is not applicable to this semi-annual report.

 

(b) A certification (Exhibit 99.906 CERT) by the registrant’s principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  General American Investors Company, Inc.  
       
  By:   /s/ Eugene S. Stark  
    Eugene S. Stark  
    Vice-President, Administration  
       
    Date: August 5, 2024  

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

  By:   /s/ Jeffrey W. Priest  
    Jeffrey W. Priest  
    President and Chief Executive Officer  
    (Principal Executive Officer)  
       
    Date: August 5, 2024  
       
  By: /s/ Eugene S. Stark  
    Eugene S. Stark  
    Vice-President, Administration  
    (Principal Financial Officer)  
       
    Date: August 5, 2024  

 

GENERAL AMERICAN INVESTORS COMPANY, INC. N-CSRS

 

Exhibit 99.CERT

 

 

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

 

I, Jeffrey W. Priest, certify that:

 

1. I have reviewed this report on Form N-CSRS of General American Investors Company, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 5, 2024

 

By: /s/ Jeffrey W. Priest    
  Jeffrey W. Priest  
  President and Chief Executive Officer  
  (Principal Executive Officer)  

 

 

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

 

I, Eugene S. Stark, certify that:

 

1. I have reviewed this report on Form N-CSRS of General American Investors Company, Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

 

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and

 

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer(s) and I have disclosed to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

 

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 5, 2024

 

By: /s/ Eugene S. Stark    
  Eugene S. Stark  
  Vice-President, Administration  
  (Principal Financial Officer)  

 

 

 

 

GENERAL AMERICAN INVESTORS COMPANY, INC. N-CSRS

 

Exhibit 99.906 CERT

 

 

Certification of Principal Executive Officer

 

In connection with the Certified Shareholder Report of General American Investors Company, Inc. (the “Company”) on Form N-CSRS for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey W. Priest, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss.1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 5, 2024

 

/s/ Jeffrey W. Priest    
Jeffrey W. Priest  
President and Chief Executive Officer  
(Principal Executive Officer)  

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

Certification of Principal Financial Officer

 

In connection with the Certified Shareholder Report of General American Investors Company, Inc. (the “Company”) on Form N-CSRS for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Eugene S. Stark, Vice-President, Administration of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: August 5, 2024

 

/s/ Eugene S. Stark    
Eugene S. Stark  
Vice-President, Administration  
(Principal Financial Officer)  

 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

   

 

v3.24.2.u1
N-2 - USD ($)
$ / shares in Units, $ in Thousands
6 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Dec. 31, 2023
Dec. 31, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Cover [Abstract]                
Entity Central Index Key   0000040417            
Amendment Flag   false            
Document Type   N-CSRS            
Entity Registrant Name   GENERAL AMERICAN INVESTORS CO INC            
Capital Stock, Long-Term Debt, and Other Securities [Abstract]                
Capital Stock [Table Text Block]  

5. Capital Stock and Dividend Distributions – The authorized capital stock of the Company consists of 50,000,000 shares of Common Stock, $1.00 par value, and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock, 23,313,823 shares were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,601,553 were outstanding on June 30, 2024.

On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock, Series B in an underwritten offering. The Preferred Shares were noncallable for the 5 year period ended September 24, 2008 and have a liquidation preference of $25.00 per share plus accumulated and unpaid dividends to the date of redemption. Cumulatively, the Board of Directors has authorized the repurchase of up to 2 million Preferred Shares in the open market at prices below $25.00 per share. To date, 398,447 shares have been repurchased.

The Company allocates distributions from net capital gains and other types of income proportionately among holders of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are not paid from net capital gains, they will be paid from investment company taxable income, or will represent a return of capital.

Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage level of at least 200% of the Preferred Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the Company is required to maintain a certain amount of discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. If the Company fails to meet these requirements and does not cure such failure, the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00 per share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage requirements could restrict the Company’s ability to pay dividends on shares of Common Stock and could lead to sales of portfolio securities at inopportune times.

The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, generally, vote together with the holders of Common Stock as a single class. Holders of Preferred Stock will elect two members to the Company’s Board of Directors and the holders of Preferred and Common Stock, voting as a single class, will elect the remaining directors. If the Company fails to pay dividends on the Preferred Stock in an amount equal to two full years of dividends, the holders of Preferred Stock will have the right to elect a majority of the directors.

In addition, the Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification as a closed-end investment company or changes in its fundamental investment policies.

The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of net assets applicable to Common Stock in the Statement of Assets and Liabilities.

Transactions in Common Stock during the six months ended June 30, 2024 and the year ended December 31, 2023 were as follows:

 

Shares

Amount

 

2024

2023

2024

2023

Par value of Shares issued in payment of dividends and distributions (issued from treasury)

529,522

$529,522

Increase in paid-in capital

21,943,392

Total increase

529,522

22,472,914

Par value of Shares purchased (at an average discount from net asset value of 18.0% and 17.4%, respectively)

(418,501

)

(776,220

)

$(418,501

)

(776,220

)

Decrease in paid-in capital

(18,900,283

)

(31,106,756

)

Total decrease

(418,501

)

(776,220

)

(19,318,784

)

(31,882,976

)

Net decrease

(418,501

)

(246,698

)

$(19,318,784

)

$(9,410,062

)

At June 30, 2024, the Company held in its treasury 8,667,049 shares of Common Stock with an aggregate cost of $317,508,116.

The tax basis distributions during the year ended December 31, 2023 are as follows: ordinary distributions of $17,749,422 and net capital gains distributions of $55,506,761. As of December 31, 2023, distributable earnings on a tax basis totaled $866,848,562 consisting of $4,926,831 from undistributed net capital gains and $861,921,731 from net unrealized appreciation on investments. A reclassification arising from a permanent “book/tax” difference reflects non-tax deductible expenses during the year ended December 31, 2023. As a result, additional paid-in capital was decreased by $2,132,000 and total distributable earnings were increased by $2,132,000. Net assets were not affected by this reclassification. As of December 31, 2023, the Company had wash sale loss deferrals of $1,991 and straddle loss deferrals of $2,383,643.

           
Document Period End Date   Jun. 30, 2024            
Preferred Shares [Member]                
Financial Highlights [Abstract]                
Senior Securities Amount $ 190,039 $ 190,039 $ 190,039 $ 190,117 $ 190,117 $ 190,117 $ 190,117  
Senior Securities Coverage per Unit $ 209.45 $ 209.45 $ 187.21 $ 161.91 $ 193.68 $ 168.07 $ 167.24  
Preferred Stock Liquidating Preference 25.00 25.00 25.00 25.00 25.00 25.00 25.00  
General Description of Registrant [Abstract]                
Share Price $ 24.84 $ 24.84 24.98 25.50 26.86 27.50 27.60  
Capital Stock, Long-Term Debt, and Other Securities [Abstract]                
Security Voting Rights [Text Block]  

The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, generally, vote together with the holders of Common Stock as a single class. Holders of Preferred Stock will elect two members to the Company’s Board of Directors and the holders of Preferred and Common Stock, voting as a single class, will elect the remaining directors. If the Company fails to pay dividends on the Preferred Stock in an amount equal to two full years of dividends, the holders of Preferred Stock will have the right to elect a majority of the directors.

In addition, the Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares, voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification as a closed-end investment company or changes in its fundamental investment policies.

           
Preferred Stock Restrictions, Other [Text Block]  

Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage level of at least 200% of the Preferred Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the Company is required to maintain a certain amount of discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. If the Company fails to meet these requirements and does not cure such failure, the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00 per share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage requirements could restrict the Company’s ability to pay dividends on shares of Common Stock and could lead to sales of portfolio securities at inopportune times.

           
Outstanding Security, Authorized [Shares] 10,000,000              
Outstanding Security, Not Held [Shares] 7,601,553              
Common Shares [Member]                
General Description of Registrant [Abstract]                
Share Price $ 49.72 $ 49.72 42.95 36.15 44.20 37.19 37.74  
NAV Per Share $ 60.14 $ 60.14 $ 51.96 $ 43.42 $ 52.59 $ 44.00 $ 43.70 $ 34.51
Capital Stock, Long-Term Debt, and Other Securities [Abstract]                
Outstanding Security, Authorized [Shares] 50,000,000              
Outstanding Security, Held [Shares] 8,667,049              
Outstanding Security, Not Held [Shares] 23,313,823              

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