All over Blossom, Reddit, and Twitter, a ticker symbol has been gaining traction. It’s a new ETF that went public last month and has gone up over 1,000% in that time frame. This means that for every dollar you put in at IPO, you would have made over $11. This ticker symbol is $DXYZ. The special part about this ETF (which is technically a closed-end fund) is that it only purchases and holds private companies and currently holds 23 positions with a combined 1.45 million share float. It strives to hold 100 positions in the future (per the name Destiny100). Here are some of the major positions (note that these %’s are not how much you will get of those companies; this is what the weighting of the ETFs holdings is): SpaceX (35%), Axiom Space (10%), Boom Supersonic (5%), Epic Games (4%), Superhuman (4%), OpenAI (4%), Revolut (3%), Stripe (3%), Instacart (2%), Chime (2%), Impossible Foods (1%), Discord (1%), Klarna (1%), and 75% into the rest. Being able to invest in private companies is a huge advantage, including when those companies only allow accredited investors to buy shares in them. This makes $DXYZ an amazing opportunity, and it seems every time you blink, it rises in price (up 76% today). But before you pounce, I need to share with you some very important things you need to know, as well as how to value an ETF. Anyone familiar with ETFs probably knows about the S&P 500. It’s a tracker of the 500 largest companies in the US. $VFV, as an example, specifically does this. $VFV holds 7% in $MSFT and 6% in $AAPL. A $100 investment into $VFV is getting you $12 into these two companies and $88 into 498 other companies (at varying weights depending on market size). Smaller companies get less weight, larger companies get more weight. Then comes valuing an ETF, and with $VFV, it's very simple since all of the companies it holds are publicly traded. $VFV is 7% $MSFT, and we know $MSFT is worth $3 trillion, so we just add up all these known values of the holdings and look at how much $VFV owns of each and get a total value. This value is called the Net Asset Value (NAV), and it's the total value of an investment fund's assets divided by the number of shares outstanding. This is what it should be trading at if you just added up all of its holdings and used the current market value of each of its holdings. $VFV has a NAV of $125.37 and its market price is $125.37, so it’s trading at exactly what it should be trading at. If an ETF is too far over its NAV, then we could potentially say it’s “overvalued”, and back off from purchasing it. The problem with $DXYZ is that the companies it holds are not publicly traded, making it incredibly difficult to get accurate data on pricing and valuation. SpaceX is valued at around $90 per share or a $150B market cap, but that data is over three months old. We can't see SpaceX’s earnings or revenue to see if the valuation has changed or not in that timeframe. This is the same with $DXYZ’s other 22 holdings. (Not to mention their 2.5% MER.) Also, a quick lesson on stocks. Just like every other publicly traded company, an ETF and the company supplying the ETF does not get your money when you buy a share. When you buy $DXYZ or $VFV shares, all it means is that some random person on the stock market just sold you those shares and he gets your money. When it comes to IPOs, a company will make public a certain amount of shares and keep the money they earned from the shares they sold. However, in the case with $DXYZ, it was a $DXYZ shareholder that offered their $DXYZ shares to the public market, not $DXYZ themselves. This $DXYZ shareholder brought their shares to the public market, sold their position for $8 per share, and we’re now trading those shares back and forth to each other right now. The insane rise in price these past weeks is simply supply and demand. Many people want a piece, but the supply is very low since not all $DXYZ shares are public (only this limited amount from that one shareholder). When you have low supply and high demand, the price rockets because of high volatility, which is what we’re seeing now. It’s worthy to note that $GOOGL also owns a piece of SpaceX. When you buy $GOOGL shares, you're also buying into their position of SpaceX. The problem is that for every share of $GOOGL you own, they own much more other assets than SpaceX. Because of this, only a small amount of your money actually gets invested in SpaceX. From doing some digging on Reddit, Seeking Alpha, and Twitter, $DXYZ’s NAV seems to be around ~$12. This is an exaggerated estimate, but would place $DXYZ at a 730%+ premium. (I don’t have any real-time data to back this estimate though.) Whether or not you should invest in something is always going to be subjective, and for me personally, I’d proceed with caution. That’s it, and happy investing! 📈
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60 Comments
Bill Johnston@billjohnston · 2yr
I have to be honest, most of my investments are made by what I read on Blossom. I don't research companies, I have no idea about a company's financials, and I can't even tell you what a P/E ratio is. I follow hype and so far it's working for me. I appreciate the information you're sharing but I'm going to dive in blindly to $DXYZ tomorrow morning without a clue about what I'm getting in to. And if my past success is any indication, I should do OK. 😁
Katsuo Morita@vmorita · 2yr
That’s crazy, I invested $800 in DXYZ when it was just $32 a week ago, and today when I checked my position it was $3100 and it’s already 12% UP After Hours! 😱😱
Anne C@cocolove · 2yrEdited
Wow, this is one of the best things I’ve read here! 🙏🙌👏 You’re a-mazing!
Terry L@terryl · 2yr
I was and am excited about this product. But the current price is crazy. Like meme stock/crypto crazy. It’s not based on reality. I made 15% on it last week. I’m not gonna lie. I’d be excited if kept it. But even if I didn’t sell it the day I sold it I would have sold it the next day or the day after that. The current price is pure speculation. It will plummet and a lot of people will lose money on it. That said, if it plummets back to the 20s I’ll buy it. Then sell it again.
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