In total, I have covered $Destiny Tech100 Inc(DXYZ)$ over 2 posts: (see below)
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13 Nov 2024 - DXYZ outperforms TSLA, Worth The Hype ?
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01 Sep 2024 - SpaceX - Investment New Frontier ! Invest now ?
The first post traces the origin of the closed end funds, with a bit of gossips thrown in.
The later post highlighted the sudden stock price surged, post US presidential election. where its performance was even ‘better’ than $Tesla Motors(TSLA)$.
Now, I finally know why the sudden price surge. (see below)
Even if the above is a hearsay, isn’t there a Wall Street ‘ adage’ that goes something like “buy the rumour, sell the news” ?
According to Reuters:
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Elon Musk's SpaceX is preparing to launch a tender offer in December 2024.
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It will be selling existing SpaceX shares at a price of $135 per share, two sources familiar with the matter said.
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The tender offer would value SpaceX at more than $250 billion.
SpaceX did not immediately respond to a Reuters request for comment.
Musk is expected to wield exert influence in Washington to secure favourable government treatment for his companies, including SpaceX, after Donald Trump's victory for a second presidency.
His personal dream of transporting humans to Mars could also become a bigger national priority under Trump, Reuters reported earlier in November.
NASA’s Artemis program, which plans to use SpaceX’s Starship rocket to send people to the Moon to practice for trips to Mars, might now be more focused on getting to Mars instead.
The goal could be to send robots to Mars before the end of this decade.
Under Trump, SpaceX is also expected to push for even softer regulations on (a) worker safety and (b) safety of participants in private space flights in orbit.
A Reuters investigation last year documented at least 600 worker injuries at SpaceX facilities across the US, and how SpaceX disregarded safety regulations and standard practices.
Why Tender Offer Matters ?
SpaceX’s valuation has seen a significant increase over the past year.
In June 2024, the company was reportedly set for a record $210 billion valuation in a tender offer, surpassing its previous $200 billion estimate.
This was driven by substantial investor demand.
Mr CEO has previously dismissed the possibility of a SpaceX initial public offering (IPO), citing the intense pressure for short-term results faced by publicly listed companies.
SpaceX’s dominance in the space sector is further highlighted by its control over two-thirds (67%) of the planet’s satellites, thanks to the rapid expansion of its Starlink satellite network.
As of September 2024, SpaceX’s Starlink service connects over 4 million customers worldwide, demonstrating the company’s significant impact on global connectivity.
Last data update as of September 2023
Based on September 2023 data from the Union of Concerned Scientists the leaders in satellite technology are :
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SpaceX with 3,395 satellites, accounting for 55% of all satellites.
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OneWeb Satellities with 502 satellites, accounting for 7% presence.
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Chinese government with 369 satellites in orbit and accounting for 5% presence.
Given that this was data from a year ago, SpaceX would have more orbiting satellites by November 2024, cementing its leading position as the company operating the largest fleet of satellites in orbit.
Now, is it clear why the tender offer matters and is crucial ?
My viewpoints: (mine only)
DXYZ price movement in November 2024: (see above)
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On 5 Nov 2024, US president election day, the CEF price opened at $11.10. (the yellow highlight)
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On 7 Nov 2024, by the time Democrat party conceded defeat, DXYZ was already $21.67.
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On 11 Nov 2024, DXYZ peaked at $42.43, that is still a far cry from its IPO peak of $99.79 achieved on 08 Apr 2024.
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Since 12 Nov 2024, DXYZ began to trend lower as the election euphoria wanes and onset jittery about US inflation sets in. (the pink highlight)
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DXYZ fell to its lowest on 14 Nov 2024, closing the day at $28.68.
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By a stroke of ‘luck’, DXYZ managed to partial recover on 15 Nov 2024, closing the week at $32.19.
Looking back, I supposed US market has already got wind of SpaceX’s tender intention and (of course) the $135 price tag.
Closed end funds aside, I really hope all that Reuters’ alleged remain as speculations: (see below)
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Use of tax payers’ monies to advance Mr CEO’s private agenda of Mars colonization.
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No let up on safety regulations standards for (a) workers and (b) participants in private space flights. Every live matters.
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There were numerous occasions where companies under Mr Musk’s umbrella have fallen short of standards, too many to be listed.
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Parting thoughts, is it scary that a single person could wield so much control, without the US government’s lifting a finger to try and keep the man behind the company on tolling the line ?
Will good news about SpaceX’s tender offer help DXYZ to reach $135 by the time weekend comes around ? Fingers crossed !
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Do you think US market will react positively to SpaceX’s tender offer news this week?
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Do you think closed end funds DXYZ benefit on SpaceX’s tailcoat ?
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To the moon