Shares of Destiny Tech100 Inc. (DXYZ) are skyrocketing on Monday, fueled by the recent US presidential election victory of Donald Trump. The closed-end investment firm, heavily invested in private technology companies like SpaceX, is poised to benefit from Trump’s second term, with anticipated changes to space exploration policies and increased focus on Mars missions.
A new fund called Destiny Tech100, designed to provide retail investors access to private companies like SpaceX, has experienced a surge in demand, resulting in significant premiums and confusion on the Robinhood brokerage platform. The fund, which trades under the ticker DXYZ, has seen its share price fluctuate dramatically despite the underlying valuation of its holdings remaining largely stable, raising concerns about its sustainability. Robinhood, which initially allowed trading of the fund, has since restricted transactions, further adding to the confusion. Experts attribute the premium to high demand from retail investors seeking to access private markets and speculate on the potential growth of tech companies, even as public tech stocks experience challenges.
Destiny Tech100, a recently launched fund, has caused a stir among investors with its volatile performance and access to private technology companies. Despite concerns raised by Morningstar and competitor ARK Investment Management about its high fees and structure, Destiny Tech100 has seen significant interest from retail investors, contributing to its rapid growth. The fund’s founder, Sohail Prasad, aims to provide wider access to pre-IPO companies typically reserved for affluent investors. ARK Investment Management, led by Cathie Wood, has its own fund in this space, named ARK Venture Fund, but it has faced challenges attracting investors. Despite criticism, Prasad remains confident in Destiny Tech100’s approach, emphasizing its simplicity and liquidity. Both ARK and Morningstar have raised concerns about Destiny Tech100’s high fees and structure, but Prasad believes the fund offers a valuable opportunity for investors to access private market opportunities.
