Stock Market

The Destiny Tech 100: What You Should Know Before Buying DXYZ Stock

If you’re a risk taker and into meme-tech stocks, Destiny Tech100 (NYSE:DXYZ) is certainly an intriguing option to consider. This close-ended management investment, the DXYZ stock, operates as an ETF, holding what managers believe are the “top 100 high-growth tech companies.” Notably, these companies are venture-backed and privately-listed, meaning investors can gain exposure to companies that may otherwise be unavailable on the private market.

Destiny XYZ Inc. manages the company and offers exposure to innovative companies like SpaceX and OpenAI. It began trading on March 26 and aims to provide everyday investors with access to exciting private businesses.

Here’s everything you need to know about the DXYZ stock.

The DXYZ Stock is a New NYSE Member

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Destiny Tech100 debuted on the New York Stock Exchange on March 26, 2024. Its opening price was $8.25, up 70.5% from the reference price of $4.84. Trading ranged from $8.25 to $30.48, closing at $9.00 with 540,000 shares traded. The company aims to provide investors access to private market growth opportunities in a public market setting, and has clearly seen very strong demand.

The company has revolutionized private-sector investing, making it more accessible and transparent. Destiny Tech100 offers opportunities previously unavailable to average investors and focuses on innovation and impact.

The Problem with the DXYZ Stock

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The Destiny Tech100 fund, which went public in March, held shares in private giants like SpaceX, OpenAI, and Epic Games. This appeal was evident as these companies were typically inaccessible to the average investor. Moreover, it is also worth noting that the DXYZ stock is not just an average exchange-traded fund. It is also a closed-end management investment company, similar to an investment trust.

Debuting at $8.25 and surging $105 in just 10 days drives investors more to buy into DXYZ. A common mistake made by many new investors is not considering the company’s NAV (net asset value). Subsequently, it dropped to as low as $25, still a significant premium of 400% over the reported NAV.

Private Sector Investing Is Only Heating Up

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Few funds match the excitement of Destiny Tech100, offering retail investors access to innovative private companies. With top holdings like SpaceX and OpenAI, DXYZ is an exclusive club, albeit with a hefty premium. Despite a recent price drop, enthusiasm remains high.

Many experts have estimated this ETF to have a net asset value (NAV) of around $5 per share, so there may be some valuation concerns, given how far this fund has run. As competition picks up in this space, it’s possible this multiple could come down. Thus, I’d categorize this company as a speculative buy, for those looking to gain exposure to the private sector.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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