Destiny Tech100 Inc. (DXYZ) shares surged 10.6% to $52.68 in premarket trading Monday, driven by reports that SpaceX could list on the Nasdaq as early as June 12 at a staggering $1.75 trillion valuation. The move comes after a turbulent week for the closed-end fund, which ended Friday down 13% week-over-week despite sharp intraday swings.
The fund, which provides retail investors exposure to late-stage private companies, holds approximately 14.4% of its portfolio in SpaceX through various special-purpose vehicles (SPVs). Another 18.1% is allocated to Anthropic, the AI research firm behind the Claude model. OpenAI-related positions are also included under other holdings, though the fund has not disclosed exact percentages.
SpaceX IPO Details
According to Reuters, SpaceX is planning to go public on the Nasdaq, potentially raising around $75 billion. If successful, the IPO would be the largest in history, surpassing previous records. The stock split scheduled for the week of May 18, which will consolidate shares on a 5-for-1 basis, is seen as a precursor to the listing.
While Destiny is a key vehicle for SpaceX exposure, analysts caution that the fund's premium to net asset value (NAV) remains elevated. As of March 31, NAV stood at $24.56 per share, meaning Friday's close of $47.62 represented a 94% premium. This gap could narrow quickly if the IPO is delayed or priced below expectations.
AI Holdings Face Structural Risks
Beyond SpaceX, Destiny's significant exposure to Anthropic and OpenAI raises concerns. Anthropic recently warned that certain stock sales or transfers—including indirect interests via SPVs—would be void and not accepted. OpenAI's policy similarly prohibits any equity transfer without written approval. These restrictions could complicate Destiny's ability to manage its AI-related positions.
Destiny founder Sohail Prasad defended the fund's due diligence, stating, “This investment was made after thorough diligence of the investment structure and the underlying documentation.” However, the risks remain, as SPVs introduce additional fees, complexity, and regulatory hurdles.
Market Context and Broader Implications
Destiny's premarket gain occurred against a backdrop of broader market weakness. The Nasdaq Composite fell 1.5% and the S&P 500 lost 1.2% on Friday, pressured by rising oil prices and bond yields. This suggests that DXYZ's move was driven by company-specific news rather than overall market strength.
The fund has been highly volatile. It jumped 30.5% on May 11, then dropped 25.0% the next day, before recovering 4.6% on Friday. Such swings highlight the speculative nature of the stock, which trades at a significant premium to its underlying assets.
Fundraising and Liquidity
Destiny raised $244.1 million in net proceeds during the first quarter by selling 8.49 million shares through an at-the-market offering at a weighted average price of $28.76. This influx of capital provides the fund with additional resources but also dilutes existing shareholders.
Other funds offering SpaceX exposure include the ARK Venture Fund and Scottish Mortgage Investment Trust, which recently defended its SpaceX valuation ahead of the anticipated IPO. Scottish Mortgage's stance underscores the high stakes involved in valuing private companies before a public listing.
Outlook and Risks
For traders, the key events this week are the completion of SpaceX's stock split and any signs of a public IPO filing. However, risks abound. A delay in the SpaceX listing, a lower-than-expected IPO price, or new SPV restrictions from Anthropic or OpenAI could all compress DXYZ's premium to NAV rapidly.
As Jay Ritter, an IPO researcher at the University of Florida, noted, “Lots of things have to go right when a company lists with such a high price tag. Most of the time, things don’t go according to plan.” Investors should be aware that DXYZ is not a direct stake in SpaceX or other private names, but a quick-moving, high-risk proxy.
