Destiny Tech100 (DXYZ) stock surged by 30% following the announcement that SpaceX is preparing a tender offer valuing the company at an astonishing $210 billion; however, DXYZ is still down -40% since we wrote about the stock here. This marks a significant increase from SpaceX’s previous valuation of $180 billion in December. The planned sale of insider shares at $112 each, driven by strong investor demand, reinforces SpaceX’s position as the second most valuable private company globally, second only to ByteDance’s $268 billion.

Destiny Tech100’s Unique Investment Approach

Destiny Tech100 is a distinctive investment vehicle that offers public market investors access to premier private tech companies. With a highly concentrated portfolio, DXYZ provides shareholders with direct benefits from SpaceX’s increasing valuation. SpaceX represents over 34% of DXYZ’s portfolio, highlighting its significance in the investment strategy. However, DXYZ’s reach extends beyond SpaceX, including stakes in several other groundbreaking companies.

Key Portfolio Holdings

• OpenAI (3.4% of the portfolio): Renowned for developing ChatGPT, OpenAI is at the forefront of artificial intelligence innovation.
• Axiom Space (9.7%): Focused on building the world’s first commercial space station, Axiom Space is set to revolutionize space habitation.
• Relativity Space (2.7%): Pioneering the development of 3D-printed rockets, Relativity Space is pushing the boundaries of aerospace manufacturing.

SpaceX’s Unstoppable Momentum

The latest boost in SpaceX’s valuation is unsurprising given the company’s string of recent successes. Dominating the commercial launch market with its reusable Falcon 9 rockets, SpaceX has redefined cost-efficiency in space travel. The expansion of its Starlink satellite internet service aims to connect billions of underserved users globally, showcasing SpaceX’s potential to disrupt the telecommunications industry.

Recent Achievements and Future Prospects

• NASA Contract: SpaceX secured an $843 million contract from NASA to develop a vehicle for deorbiting the International Space Station by 2030. This contract underscores SpaceX’s pivotal role in future space missions.
• Starship Program: SpaceX’s ambitious Starship program, designed to revolutionize space travel and facilitate Mars colonization, holds the potential to further elevate the company’s value. Success in this endeavor could signify a new era of space exploration.

The Impact on DXYZ

SpaceX’s rising valuation directly enhances DXYZ’s appeal to investors, given the significant exposure within its portfolio. The potential breakthroughs from other holdings, such as OpenAI’s advancements in artificial intelligence, further amplify DXYZ’s growth prospects.

Benefits to Shareholders

DXYZ shareholders are poised to benefit from the escalating value of its holdings. The diversification across leading tech companies ensures that investors are not solely reliant on one entity’s success. The synergy between SpaceX’s groundbreaking space technologies and other innovative companies within the portfolio creates a robust foundation for future gains.

DXYZ Technical Analysis

Price Trend Analysis:
The stock has experienced a significant decline from its peak above 120 to a recent low around 5. Since mid-May, the stock has traded sideways, indicating a consolidation phase. Recently, there is a slight uptick in price, closing at 15.59.

Moving Averages:
The 200-day moving average (blue line) is around 16.77 and trending downwards, indicating a long-term bearish trend. The 50-day moving average is not shown but given the recent price action, it’s likely still above the current price, reinforcing the bearish outlook.

Volume Analysis:
Volume spikes were observed during the major price decline. Recently, volume increased again, suggesting renewed interest in the stock. This could be due to the price attempting to recover.

Relative Strength IndexIn the world of technical analysis, the Relative Strength Index (RSI) stands as a cornerstone tool for traders seeking insights into market momentum. Developed by J. Welles Wilder ... More (RSI):
The RSI is currently at 57.05, which is in the neutral zone. This suggests that the stock is neither overbought nor oversold at the moment.

On Balance VolumeThe On Balance Volume indicator (OBV) is a technical analysis tool used to measure the flow of money into and out of a security over a specified period of time. It is a cumulative ... More (OBV):
The OBV shows a significant spike and subsequent decline, indicating that volume was higher on down days compared to up days. Recently, OBV has stabilized, suggesting that the selling pressure may have subsided.

Stochastic RSIIn the realm of technical analysis, the Stochastic RSI (StochRSI) emerges as a powerful tool for traders seeking to navigate market dynamics with precision. Developed by Tushar S. ... More:
The Stochastic RSI is at 1.000, indicating an overbought condition. This suggests that the recent price increase might be overextended and could be due for a pullback.

Average Directional IndexThe Average Directional Index (ADX) stands as a cornerstone indicator in the toolkit of technical traders, offering insights into the strength of market trends. Developed by Welles... More (ADX):
The ADX is at 12.16, which is relatively low. This suggests a weak trend, confirming the sideways movement seen in the price chart over the last month or so.

Chaikin OscillatorNamed after its creator Marc Chaikin, the Chaikin Oscillator stands as a formidable tool in the arsenal of technical analysts. This oscillator is designed to measure the accumulati... More:
The Chaikin Oscillator is at -357,211, indicating a bearish divergence. This suggests that the underlying buying pressure is weak despite the recent price uptick.

Support and Resistance Levels:
Support is likely around the recent lows of 5. Resistance can be expected around the 200-day moving average at 16.77 and the recent high of 20.

Time-Frame Signals:

• 3-Month Horizon: Hold. The stock is showing signs of a possible rebound but needs to establish a stronger trend and clear the resistance levels convincingly.
• 6-Month Horizon: Hold. The overall trend is still bearish, and while there might be a recovery, it is too early to confirm a sustainable upward trend.
• 12-Month Horizon: Sell. Given the long-term downtrend and weak ADX, the stock remains risky. Better opportunities might exist elsewhere unless substantial positive news or changes in fundamentals occur.

In summary, while there are signs of a potential recovery in the short term, the overall technical indicators suggest caution due to the prevailing bearish trend and weak buying pressure.

Remember, past performance is not an indication of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions. 🧡

Forecast Demand For Space Travel

The forecast demand for rockets to facilitate space travel, asteroid mining, and planetary exploration is expected to grow significantly in the coming years. This growth is driven by various factors, including technological advancements, increased private sector involvement, and growing interest in space resources. Here’s a comprehensive overview of the forecast demand in these areas:

Space Travel and Exploration:

The demand for rockets to support space travel and exploration is expected to increase substantially in the near future. Several key factors contribute to this growth:

• New Rocket Debuts: 2024 is anticipated to be a significant year for new rocket launches, with as many as 15 new rockets potentially making their debut[4][6]. This includes heavy-lift vehicles like ULA’s Vulcan, Blue Origin’s New Glenn, and Arianespace’s Ariane 6, which are set to challenge SpaceX’s dominance in the launch market[6].
• Increased Launch Frequency: The global launch market is projected to see about 200 launches in 2024, indicating a growing demand for access to space[6]. Companies like ULA are planning to ramp up their launch capabilities, with ULA aiming to achieve a launch rate of one Vulcan rocket every two weeks by 2025[6].
• Diverse Mission Types: The order books for new rockets include a variety of missions, encompassing commercial, governmental, and intergovernmental entities[6]. This diversity in mission types suggests a broad-based demand for launch services.

Asteroid Mining

The space mining market, which includes asteroid mining, is forecasted to experience significant growth:

• Market Size: The global revenue for the Space Mining Market is expected to surpass US$1.66 billion in 2024, with strong revenue growth projected through 2034[3].
• Technological Advancements: Progress in spacecraft design, robotic technology, and autonomous operations is making asteroid mining more feasible[3]. Companies like AstroForge are planning missions to explore M-type asteroids, which contain higher concentrations of metals[5].
• Resource Demand: The growing need for precious metals and rare earth elements, coupled with their finite supply on Earth, is driving interest in space mining[5]. This demand is further fueled by the requirements of the clean energy transition and battery production[5].

Planetary Exploration

The demand for rockets to support planetary exploration missions is also on the rise:

• Mars Exploration: Ongoing interest in Mars exploration continues to drive demand for launch capabilities. For instance, NASA’s PREFIRE mission, set to launch in May 2024, will study Earth’s heat losses from polar regions, contributing to climate science[2].
• Lunar Missions: The Artemis program and other lunar exploration initiatives are creating significant demand for heavy-lift rockets. SpaceX’s Starship, for example, is being developed with the capability to deliver up to 100 tons (potentially expandable to 150 tons) of payload to the Moon[1].
• Interplanetary Missions: The development of rockets like Ariane 6 with reusable upper stages opens up opportunities for launching European scientific missions within the solar system[1].

Challenges and Considerations

While the forecast demand for rockets in these areas is promising, there are several challenges to consider:

• Launch Costs: Despite efforts to reduce costs, space missions remain expensive. For instance, launching one Starship/Superheavy currently costs approximately $100 million, with a $400 million price tag for a trip to the Moon[1].
• Technological Hurdles: Ongoing technological challenges, such as in-orbit refueling for long-distance missions, need to be addressed to fully realize the potential of space exploration and resource utilization[1].
• Regulatory Environment: The space mining industry, in particular, faces regulatory challenges and ambiguities in international law regarding resource extraction in space[3].

In conclusion, the forecast demand for rockets to support space travel, asteroid mining, and planetary exploration is robust and growing. The combination of technological advancements, increasing private sector involvement, and the expanding space economy is driving this demand. However, the industry must overcome significant technological, economic, and regulatory challenges to fully capitalize on these opportunities.

Looking Ahead

The recent valuation surge of SpaceX to $210 billion has significantly boosted Destiny Tech100’s stock, reflecting the immense potential within its concentrated portfolio. As SpaceX continues to achieve milestones and other portfolio companies like OpenAI advance their technologies, DXYZ is well-positioned for substantial growth in the coming months and years. This development highlights the strategic advantage of investing in DXYZ, providing public market investors with unparalleled access to some of the most promising private tech companies globally.

Frequently Asked Questions (FAQ)

Citations:
[1] https://maxpolyakov.com/forecast-of-the-aerospace-industry/
[2] https://emergingtrajectories.com/a/pub/rocket-lab-forecast-may-2024-to-2025
[3] https://finance.yahoo.com/news/space-mining-market-report-2024-105300017.html
[4] https://www.fastcompany.com/91017198/2024-rockets-space
[5] https://www.mining.com/asteroid-mining-startup-to-launch-mission-in-early-2024/
[6] https://interactive.satellitetoday.com/via/january-february-2024/will-2024-be-a-year-of-rocket-debuts/
[7] https://phys.org/news/2023-12-rockets.html