Dec. 14 at 12:19 AM
$DXYZ costs almost 2x the value of the stocks it holds (
$21.30)- even w/ SpaceX at
$1.5T. Would you buy an SP500 fund whose share price is 2x more than the value of the stocks it holds?
Reasons DXYZ is so overvalued:
1. It is a closed end fund. The fund manager is not selling any new shares. In a normal fund, the fund manager can buy more underlying stocks and sell more shares of the fund to meet demand to keep the price close to the value of the stocks held. Not so with a CEF.
2. Only 14 million share float. So a bunch of small investors can push the price up, especially when rallied by influencers. Look at the 1yr price history.
3. It holds non-public shares including SpaceX. So 5-20% premium justified - not 100%.
Not saying it can’t go up from here. But you are operating on the “greater fool” theory.
I am not short. I am long
$SATS. Morgan Stanley analyst set a price target for SATS of
$110 with SpaceX at
$400B (
$212/sh). At
$1.5T, that is a PT of
$214.94 for SATS.
