A brand new hype idea has appeared!

Just last night, an American closed-end fund management company —$Destiny Tech100 (DXYZ.US)$At one point, its stock price soared by nearly 126%, but it still surged 76.51% at the close, with transactions exceeding 300 million US dollars. The fund was listed on March 26. The lowest price was $8.25. It rose to a high of $75.79 last night. In just a few trading days, the biggest increase was nearly 800%. This is rare, especially for a company similar to what is involved in closed-end fund management.

According to Destiny Tech100's official website, it is a closed management investment company registered under the 1940 Act. They invest in a portfolio of 100 top venture capital-backed private tech companies, giving everyday investors the first chance to access these private equity market leaders. Judging from its current holdings, the largest position is in Musk's SpaceX, accounting for 34.6% of the total positions, while the well-known artificial intelligence company OpenAI accounts for 3.8%.

So what does this company's stock price performance actually mean? Analysts believe that a new hype idea may have emerged. Fluctuations in pricing in the primary market are affecting the market value of secondary holders. A perfect story must not only be told to first-level investors, but also spread to the secondary market through a real form.

A rare surge

Last night, the stock price of an asset management company similar to a closed fund in the US stock market suddenly skyrocketed. The biggest increase was nearly 126%, and the closing increase was still over 76%. The biggest increase in the company's stock price was nearly 800% in 8 trading days after listing.

So what kind of company is this? According to the company's official website, Destiny Tech100 is a closed managed investment company registered under the 1940 Act. They invest in a portfolio of 100 top venture capital-backed private tech companies, giving everyday investors the first chance to access these private equity market leaders. To be eligible for the Destiny Tech 100, companies must be vetted by top US institutional investors and meet key health metrics. Furthermore, the companies in the portfolio have generally reached the level of maturity and stability expected by late-stage venture capital support companies.

Destiny Tech100 uses an unstructured approach to building portfolios, participating in major rounds promoted by the company and secondary purchases from existing shareholders, seeking the best execution of the portfolio, and reaching out to top companies with attractive prices and structures. As of December 31, 2023, the fund accounts for about 90% of the initial capital for primary and secondary investments, including well-known companies in space exploration (SpaceX, Axiom), entertainment (Epic Games, Discord), fintech (Brex, Stripe), and artificial intelligence companies (OpenAI). Judging from its current holdings, the largest position is in Musk's SpaceX, accounting for 34.6% of the total positions, while OpenAI's holdings account for 3.8%.

Big signal

Although the company's market capitalization is small, its increase is indeed sending a strong signal.

Analysts believe that the performance of the company's stock price has released at least three major signals:

First, the market's recognition of future technology is still very high, and the logic is clear, and it cannot be falsified for quite some time. As the name suggests, it represents the fate of mankind;

Second, there is still plenty of market liquidity. Only when capital is sufficient will this type of growth subject be unscrupulously boosted;

Third, the A-share market may usher in a new mapping, and companies that have invested heavily in technology stocks (venture capital concepts) may be sought after. Previously, when the market hyped up Kimi concept stocks, Jiu'an Medical and others had a strong performance. In the future, the market may also explore similar topics to hype up.

Actually, there are probably two deeper reasons behind this:

First, the future of humanity lies in economic development, and economic development depends on the refined division of labor and improved transaction efficiency provided by technological innovation. It was at this time that the global economy returned to a positive trend. According to the March Global Manufacturing Purchasing Managers' Index released by the China Federation of Logistics and Purchasing today (6th), the global manufacturing purchasing managers' index returned to an expansion range of more than 50% in March, and the global economy continued to rise steadily. The global manufacturing purchasing managers' index for March was 50.3%, up 1.2 percentage points from the previous month, ending a 17-month trend of operating below 50% and returning to the expansion range. In the first quarter, the average value of the global manufacturing purchasing managers' index was 49.6%, higher than the average of 47.9% in the fourth quarter of last year. The overall recovery trend was better than in the fourth quarter of last year.

Second, the supply of global stocks is dwindling. In the context of declining stocks, Destiny Tech 100 is only highly sought after for alternative supply that has a theme and caters to stocks. According to data from the British Financial Times, the global supply of listed stocks is shrinking at the fastest rate in at least 25 years. As the economic situation and geopolitical uncertainty put pressure on the issuance of new shares, companies continue to buy back their shares in large quantities. J.P. Morgan analysts say the phenomenon shows that business executives still lack confidence. In theory, a rising stock market and a relatively strong economy should encourage companies to raise capital by issuing new shares at high prices rather than spending cash to buy treasury stocks; however, the data shows that global listed stocks have shrunk net by 120 billion US dollars this year, surpassing last year's 40 billion US dollars, which means that net worth has declined for the third year in a row. This is something that has not occurred since the data was compiled in 1999. According to J.P. Morgan Chase data, this year's treasury stock purchases (treasury shares, also known as “recycled shares”, refer to shares purchased and held by the stock company itself. These shares have not been cancelled and may be re-sold or used for other purposes in the future) at about the same rate as the past three years, reaching about 1.2 trillion US dollars by December. However, IPOs and other stock issuance have fallen short of expectations.

edit/new