Investors are now returning to the Fundrise Growth Tech Fund (VCX) after its dramatic crash, days after CEO Benjamin Miller addressed skeptics in an hour-long podcast interview.
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VCX Stock Bounces Back after Short-Seller Attack
Shares in the closed-end fund climbed about 13% early Wednesday to roughly $148, extending Tuesday’s 17.97% surge. This rebound followed an 81% plunge in VCX from its March 25 peak of $575 to $110 on Monday.
VCX, whose top holdings in Anthropic, Databricks, and OpenAI offer investors pre-IPO (initial public offering) access to highly sought-after private companies on Wall Street, started to crater on March 26 after activist short-seller Citron Research questioned the sponsor’s credibility, pointed to a past investment promotion violation, and queried the fund’s hefty premium to its initial net asset value.
Citron also warned that the fund’s first 100,000 investors, who came in before its March 19 market debut and are locked up for six months, “will all be looking at the same exit at the same time” when the lockup expires in September.
CEO Says VCX’s Model Baffled Skeptics
However, when asked to address skeptics by interviewer Molly O’Shea while speaking on the Sourcery podcast, Miller argued that critics appear to be confused by its business model and think it operates as a special purpose vehicle.
The co-founder of Fundrise LLC, which is the firm that manages the fund, also noted that people seem to attach more importance to having a brand name, citing popular venture capital firm a16z as an example. He added that skeptics also seem to care about educational background, like having a Master of Business Administration degree or having gone to the Wharton School, the University of Pennsylvania’s popular business school.
VCX’s peak of $575 represented a 2,934% premium — about 30 times its recent net asset value (NAV) of $18.95 per share. The pre-market trading price of $148 per share on Wednesday still implies a 681% premium to that NAV, or about seven times higher.
Is VCX Stock a Buy?
TipRanks’ technical indicators continue to signal VCX as a Buy. This is based on four Bearish, four Neutral, and eight Bullish signals logged over the past week.
