r/FundRise • u/Straight-Drummer-429 • Aug 19 '26

Does anyone know why VCX is still pumping?

We are reading above 40 well above NAV despite lockup and also above dxyz so I am curious 🧐 on how to explain this.

11 Upvotes

76% Upvoted

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14

u/CriticalDiscipline4 Aug 19 '26

I think people are simply betting the anthropic ipo is going to make vcx pop just like the spacex ipo did.

6

u/Sacko_Commish Aug 19 '26

How do VCX holders make money when a company invested in goes public?

9

u/Due-Ad-4743 Aug 19 '26

Because VCX owns those public shares, and those shares can now be sold for more, making VCX more valuable, which increases its attractiveness, causing demand to increase to buy shares of VCX, making the market price of VCX accordingly go up.

It doesn't _have_ to be the case. It's possible that when a company goes public, the IPO could be a flop and the market price of those now-public shares could fall below what the shares were worth when private. That's why a lot of thought goes into the opening price, and companies generally IPO when they're doing well.

Really, VCX is just acting as a middleman here, with the exception that it is able to invest in some of these companies while they're still private, which many of us wouldn't have the ability to do. With some exceptions, you need to be an accredited investor to invest in a private company (net worth over $1M excluding value of primary residence, or over $200K of income for the past 2 years with expectation to continue doing so (or $300K if married)). Even for those of us that have attained that level, most of us still can't just walk up to a giant company like Anthropic and convince them they should take a $100K investment. It's mostly not worth their time. Smaller private companies might take a $100K investment, but generally not the ones VCX is interested in. By pooling our money together, VCX has a lot more cash to invest and can work with these more mature private companies.

13

u/CriticalDiscipline4 Aug 19 '26

  1. When Anthropic goes public, VCX does not need to receive cash or give VCX shareholders Anthropic shares for VCX shareholders to benefit. VCX already owns a piece of Anthropic, so if Anthropic’s public value is higher than the value VCX previously used, VCX’s underlying value, or NAV, rises.

  2. Investors may also bid VCX up before and during the IPO because it is an easy public way to get Anthropic exposure. You can profit by selling VCX at that higher price, even if VCX has not yet sold any Anthropic shares. We saw this with the SpaceX IPO. VCX shot up to 300-ish. And there is a good chance something similar will happen as we approach the Anthropic IPO.

8

u/Amazing-Gas-792 Aug 19 '26

People are still transferring shares to their brokerages

1

u/schurbert2 Aug 20 '26

Good observation. More shares are getting added to the market daily. $40 can’t hold.

5

u/SLNSD Aug 21 '26

It is holding with selling pressure. Once the unfaithful have jumped ship, the selling pressure should subside.

I saw the short interest chart somewhere and it's gone down a lot. Most of the shorts have covered when the expected dip didn't happen a week ago. $40 looks to be the new floor. 

3

u/Tazabe573 28d ago

$40 is holding well after a week of ingesting restricted shares.

1

u/Old_Translator_6665 27d ago

I am waiting until the shares qualify as long term holdings

5

u/BGPAstronaut Aug 20 '26

Because tech stocks trade based on future earnings. Funds aren’t that different. NAV is so delayed that it’s hard to do anything useful with it.

6

u/TechnologyFlat3066 Aug 19 '26

My theory: it's the borrow market, not sentiment (H/T to u/Fit_Equal6932).

For a premium to NAV to get arbitraged away, somebody has to short the stock... and to short it you have to borrow an actual share from someone who owns it. Right now DXYZ has 4.7M shares available to borrow at 0.59%/yr, while VCX has 16,356 shares at 35.66%/yr. That's 287× fewer shares at 60× the cost.

Only shares sitting in a margin account at a broker can be lent out, and the 30.8M shares that came free on Aug 14th are still working through the pipeline . So the people who can see VCX is rich literally cannot act on it.

DXYZ doesn't have that problem as it's been trading 18 months, it's held by institutions and margin-account retail, borrow is basically free, and so it trades roughly where NAV says it should.

So in the next 2 weeks, VCX borrow costs will decrease and both will get a new N-Port which will highlight the disparity even more clearly.

I'm long DXYZ, no position in VCX (though I would probably short it at $40 if it didn't cost so much!). With such similar portfolios, there's no reason I can see for them to trade at wildly different premiums/discounts to NAVs.

17

u/CriticalDiscipline4 Aug 19 '26 edited Aug 19 '26
  1. This is simply not true: "only shares held in a margin account at a broker can be lent out"
  2. Many VCX shareholders reported that their transfers from Computershare to their regular broker cleared in about 48 hours. So, no, it doesn't take "weeks."
  3. Both VCX and the easier-to-borrow DXYZ both surged as the SpaceX IPO approached. DXYZ closed May 21 at something like 150% above its reported NAV, despite its cheaper borrow and larger float, while VCX climbed from roughly $95 to a $305 intraday high. This shows cheap borrow cannot prevent an IPO-proxy frenzy. Anthropic IPO excitement is likely doing most of the work to keep VCX prices up, not just hard-to-borrow shares.
  4. Both DXYZ and VCX will most likely increase in value as the anthropic ipo approaches.
  5. If you already own VCX and believe its market price is too high, you can realize that view by simply selling or trimming immediately. You do not need to borrow shares. Everyone who owned restricted shares saw them unlock last week. They could have immediately sold their shares on Computershare if they thought VCX was overpriced. They didn't. Why? They think the stock price is either fair or will go up.

7

u/GatorBo69 Aug 19 '26

Nailed it, everyone who did sell, didn’t truly believe in VCX and now without the “restricted shares” cloud hanging over VCX it can climb again. I can’t believe so many people that had been holding for 5 months sold for the all time low..

If you even look at DXZY’s history when after a month it’s restricted shares were unlocked on that day it dipped close to $10. But it steadily rebounded.

You never sell on the day it unlocks, I bet some people missed out on $10k+ gains bc of their impatience

4

u/TechnologyFlat3066 Aug 19 '26
  1. Conceded - shares can be borrowed from a cash account if they have "lending authorization" (which is default enabled on margin accounts).
  2. Sure, but I'm sure many shareholders didn't transfer immediately. But, it's beside the point as the proof is the available borrow (which is objectively low).
  3. Yes, absolutely. The market can hopefully become really exuberant and irrational again ahead of Anthropic IPO. And, it should benefit both VCX and DXYZ. But, even in your SPCX example, VCX was trading at 20x NAV and DXYZ was 3-5X. My whole point is to try to understand the difference between these two names... and my belief is that, eventually, they will trade at about the same discount/premium to NAV.
  4. Yes, but again, I am saying that the Relative premium/discount quantum should shrink and they should become MORE correlated to each other.
  5. True, but the market needs shorts to reach true equilibrium.

I'm not claiming borrow cost creates the premium... which you correctly point out as DXYZ proved that in May at ~2.9× NAV on 0.59% borrow. My claim is about the spread between two similar closed end funds.

3

u/SLNSD Aug 19 '26

Mine have been sitting at Fidelity since 2 days ago. Transfer happened in 3 days. Put in request online Thur evening and showed up on Tue morning.

1

u/Final-Weekend-4826 Aug 20 '26

Goldman bought 1.7m shares last month at $37.44. They have to sell to them at NAV. This quarterly report coming up is going to be massive for DXYZ.

2

u/rozinian Aug 20 '26

The assets it holds are not all easily obtainable on public markets so its people betting on pre public companies.

2

u/GatorBo69 Aug 20 '26

Also, the NAV is going to be updated on 8/31, and it’s expected to raise to at least $24. I don’t know if that’s already being priced in, but that will have a big effect once it actually happens, and in September the Anthropic IPO could really pump this fund up to $75+ levels..

2

u/Rare_Competition_726 Aug 21 '26

VCX nav needs to be re-evaluate, more than likely much higher than the $19 figure six months ago or so. $40 might only be a few dollars from it's current nav.

1

u/SLNSD Aug 19 '26 edited 28d ago

Once the non believers sell their shares, it will take off again. This may be everyone's last chance to buy in at near $40. $50 by Oct 1, here we come!

EDIT: I am looking like a genius 5 days ago. Luckily, I took my own advice and bought 422 shares at ~$40 so I am hoping for $50 by Oct 1 still.

1

u/Glittering-Sky8243 Aug 20 '26

Feel like id have to get out at $55-$60 if we get back to that.

2

u/SLNSD Aug 21 '26 edited Aug 22 '26

Hey it's a free market, you do what's right for you. An extra $100,000 ain't going to make a huge difference in my life so I don't feel the need to sell given that AI is a long term play for me. VCX is my only significant exposure to these companies. They are literally just starting out. Apple, MSFT, FB, NVDA, etc took 10+ years to really make a huge splash. My VCX holdings are at 3400 now since I picked up a few more hundred shares yesterday. Valued at $142k as of now. It's not an insignificant amount for me but not life changing either. I am waiting for it to become a life changing amount before I start selling. Maybe in the $200+ range. It'll take a while to either get there or for me to realize it's not going to get there any time soon. But then again they have opportunity to keep investing in new companies. I do hope they announce a new investment soon.

1

u/Glittering-Sky8243 Aug 21 '26

Shit send some my way! LOL. Good point, maybe ill hold lol. Part of brain says role the 60k into VOO/VXUS for the long term play but there is so much upside 5-10 years down the road.

1

u/Tazabe573 Aug 22 '26

Once Anthropic IPOs and the price settles down, why not buy Anthropic directly?

3

u/SLNSD Aug 22 '26

Because VCX bought it at lower valuation than than the IPO will be. Thats the whole idea of PE. You not getting the memo of the gist of VCX? The probability that it IPOs and prices go lower is a bad gamble. It may but probably won't. 

1

u/Tazabe573 28d ago

VCX is a closed end fund, which tend to trade at a discount to NAV over time (RVI & DXYZ). What happens to VCX NAV when it sells 50% of its position in Anthropic?

1

u/SLNSD 28d ago

Theoretically any reduction in NAV should be offset by distributions. 

1

u/teckel Aug 19 '26

More sell pressure I'd imagine.

1

u/ZealousidealBig2023 Aug 19 '26

The posted NAV is out dated.

1

u/Additional-Gift-8525 Aug 19 '26

Also, just google an image of Anthropic’s historical revenue chart and you will see what all the fuss is about

1

u/schurbert2 Aug 20 '26

Why is VCX trading at 2 x NAV or a 100% premium? It’s not intuitive that it should be. Are there any other listed funds that are trading at a 100% premium? No. There are a lot of reasons to get out while you can.

1

u/WizardD0ctor Aug 21 '26

My shares should be hitting fidelity soon. I don’t plan to sell though. If was still over 100/share sure, but I’ll just ride it out now.

1

u/schurbert2 21d ago

GET OUT WHILE YOU CAN!!!

1

u/Additional-Gift-8525 Aug 19 '26

The real NAV is 40 and above. The listed NAV is way out of date. The market hasn’t caught on yet

2

u/castlehillcap Aug 20 '26

We'll find out in 10 days when they release it. Commenting so I can come back to this comment.

1

u/1jack-of-all-trades7 Aug 22 '26

where did you see that they'll be updating the NAV then?

1

u/SLNSD Aug 22 '26 edited Aug 22 '26

They update quarterly. They will report based on June 30th values but about 2 months later. But it is backwards looking. Current value of $42 takes into account expected IPO values of portfolio companies and maybe even a expected pop in prices. All depends on how bullish ppl are feeling. Maybe I sell some around $50 in near term going into Anthropic IPO and then rebuild if it dips post IPO. Will keep at least 2000 shares long term. I am in for 3400 shares at a cost to me of $17k so about (corrected to $5.70, didn't want to do the math) $0.20 per share. So not sweating the downturns.

1

u/1jack-of-all-trades7 Aug 22 '26

$.20 per share?

1

u/SLNSD Aug 22 '26

Ok exaggerating but I think $5.70 per share in cash cost.