Key insights
- The author highlights a massive overvaluation in VCX, a closed-end fund holding private AI companies like Databricks, Anthropic, and OpenAI. The fund's market cap has ballooned to an extreme premium over its net asset value, implying astronomical valuations for the underlying AI firms. The author believes this is unsustainable and predicts a significant correction, though shorting the stock is difficult due to limited availability. This reflects speculative froth in AI-related assets.
$VCX is going on an autistic bull run despite being a closed end fund of fixed assets. It's one of the most retarded things I've seen all year.
Up over 1000% in a week, the company gained ~5B in market cap today.
The company is ~437M self-reported NAV of private companies.
But with 28.3M shares outstanding
That 380/sh * 28.3M = 10.7B market cap for 437M of NAV.
You can see what they own, most of the speculative value comes from their holdings in these hard to find AI private companies:
So I did some math on what the current MNAV multiple means.
Applying this premium to the underlying private company valuations provides the following "look-through" metrics:
|Holding|Portfolio Weight|Implied Stake Value in VCX|Est. Private Co. Shares Outstanding|% Held by VCX|Assumed Market Cap| |:-|:-|:-|:-|:-|:-| || |Databricks|21.9%|$2.36 Billion|~705 Million|0.088%|$2.68 Trillion| |Anthropic|11.5%|$1.24 Billion|~1.47 Billion|0.016%|$7.61 Trillion| |OpenAI|9.4%|$1.01 Billion|~1.49 Billion|0.006%|$16.82 Trillion| |Total Top 3|42.8%|$4.61 Billion|—|—|$27.11 Trillion|
So are you buying OpenAI at 16B for the valuation MSFT, NVDA, GOOG, AAPL combined?
This is an imminent -80%+ if you have pain tolerance.
Getting fucked on my short 50 shares position right now, but I'm sure we'll head back to reality. Also difficult to even find shares to short.
Who are you up against? Crayon sniffer retail that thinks they're holding the next 100x, while buying at 20X nav.