DXYZ surge +204% on SpaceX Open Tender news
It’s Finally Happening.
After Reuters first reported on SpaceX’s seeking an open tender back on 16 Nov 2024 (click here ! to read the details), Bloomberg has followed up with a latest update. (see below)
Bloomberg has just reported this news, further cementing that it is quite likely going to happen.
What’s more, Bloomberg has reported a new estimate that values SpaceX at $350 billion, significantly more than the previous reported estimate of $250 billion.
This puts SpaceX on par with some of the world’s largest publicly traded companies in terms of market capitalization. eg. $Netflix(NFLX)$ -$383.746 billion, $Oracle(ORCL)$ - $502.698 billion.
It is a $100 billion difference or a +40% increase from the last reported valuation; cementing SpaceX's status as the most valuable private startup in the world.
SpaceX was last valued at about $210 billion in a tender offer earlier this year. What a difference almost one year makes.
As mentioned in a few of my posts, $Destiny Tech100 Inc(DXYZ)$ will stand to benefit from this open tender.
How ?
DXYZ, a closed-end fund (CEF) focused on pre-IPO technology companies, stands to benefit significantly from SpaceX's open tender in several ways:
(1) Valuation Boost:
The tender offer indicates strong investor demand for SpaceX shares, that could drive up its valuation.
As SpaceX is a major holding in DXYZ, this increased valuation would positively impact DXYZ's net asset value (NAV).
(2) Liquidity Enhancement:
The tender offer could potentially increase the liquidity of SpaceX shares.
While DXYZ itself is not directly involved in the tender, improved liquidity for its underlying holdings can benefit the fund's overall performance.
(3) Investor Sentiment:
Positive news about SpaceX, such as the tender offer, can boost investor sentiment towards DXYZ.
This could lead to increased demand for the fund, driving up its share price.
Other Considerations.
it Is important to note though that the impact of the tender offer on DXYZ's funds will depend on other factors too. (see below)
(i) Tender Offer Details:
Specific terms of the tender offer, such as the (a) price and (b) number of shares offered, will determine its direct impact on SpaceX's valuation.
(ii) Market Conditions:
Overall market conditions, including (c) investor sentiment and (d) broader economic trends, can also influence DXYZ's performance.
(iii) DXYZ's Investment Strategy:
The fund's investment strategy and diversification across other pre-IPO companies will also play a role in mitigating potential risks.
In terms of how this will be reflected in DXYZ's funds, the most immediate impact will likely be seen in its NAV.
As SpaceX's valuation increases, so too will the value of DXYZ's holdings in the company.
This could lead to an increase in the fund's share price, although it's important to remember that closed-end funds can trade at a premium or discount to their NAV.
It's also worth noting that DXYZ is a relatively new fund, and its performance can be volatile. (see below)
YTD Performance.
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DXYZ went public on 26 Mar 2024.
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Immediate it zoomed to its peak of $99.79 on 8 Apr 2024. (see above)
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After the euphoria was over, the funds traded between $9 to $16 per share.
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It stayed that way until early November 2024 when the press got winds of the open tender.
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Its 2nd peak happened on 06 Dec 2024 at $67.26.
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FYI, based on November performance (1 month), it has surged +204.34%. Incredible no..
My viewpoints : (mine only)
In my November post, Reuters estimated that each share could be worth about $135, based on SpaceX’s valuation of $250 billion.
With a refreshed valuation of $350 billion (now), using simple mathematics, each share will come to be about $189.
There will never be a better time for Space X to go through with its open tender than now, when the market is still buoyant and a Christmas rally (no matter how muted) in toll.
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Do you think SpaceX open tender will have a rub-off effect on $Tesla Motors(TSLA)$ ?
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Do you think DXYZ share price will rise to anywhere close to SpaceX open tender stock price ?
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Mon, 9 Dec 2024 - pre-market price is up +7.37% or +$4.94, to $72.20.
Think punters are driving the price to its 8 Apr 2024 price $99.79.
Million-dollar question is 'When will Mr CEO announce the open tender"?
When it happens, price target will be known & DXYZ will play catch up.
Do NOT get caught in the euphoria if you can afford. Even I am 'too scare' to add more to my token stocks.
Will ride it to its peak (whatever that is) & cash out. My 2024 Christmas present to myself.
I feel like I can buy DXYZ now
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