*as of 8/2, Sources: S&P, BTC, FTSE, DJRE, GOLD

Riding the wave of anticipation for SpaceX’s IPO, as well as potential IPOs for major startups such as OpenAI and Anthropic, publicly traded closed-end funds holding Pre-IPO shares exploded in value earlier this year. The Fundrise Innovation Fund (NYSE: VCX), Robinhood Ventures Fund I (NYSE: RVI) and Destiny Tech 100 (NYSE: DXYZ) all saw significant gains in mid-May, and all of them have seen their prices fall back to earth since. VCX hit $380 per share right after its IPO in March, then dropped below $80 before zooming up above $280 again in May. It is now sitting at $33 per share, a nearly 90% fall, and is down more than 40% in the past five days. RVI has fallen from $73 per share to below $25 per share, while DXYZ has dropped from above $70 to below $23.

➨ TAKEAWAY: The drawdown has always seemed inevitable, as all three Pre-IPO proxies were trading well above their official net asset values (NAVs) and prices became untethered from reality due to significant investor demand for exposure. With the price drops of SPCX since its IPO, and without the appeal of getting access to that name while private, retail investors are no longer buying into the hype and have been unloading their shares of these funds. One notable thing to watch for this month is the lockup expiration for VCX, which was moved up by a month to August 14. Pent-up selling demand from Pre-IPO holders could send the price even lower, and long-term believers in their portfolio could be looking at a bargain.

In the newest episode of Smart Humans, Slava Rubin talks with Orbit2Orbit founder Bradley Hatton-Jones about the SpaceX IPO, the future of space logistics, investing into space tech, and the in-orbit economy.

💵 Record default rate: The private credit default rate reached a record high of 6.0% in Q2, up from 5.7% in Q1, according to the ratings agency Fitch. Contrary to industry concerns arising from AI, software companies actually posted the lowest default rates, while industrials and manufacturing posted the highest.

🤖 AI hedge fund collapse: The prominent AI-focused hedge fund Situational Awareness, which had seen exponential gains of more than 1,000%, saw its holdings reportedly drop from $45 billion to $10 billion, leading to an emergency sale of almost its entire public equity portfolio to rival fund Citadel. Apparently, Situational Awareness was heavily leveraged and the recent downturn in AI infrastructure and semiconductor stocks led to a margin call.

🏢 Office prices ticking up: Suburban office prices rose 3% nationwide year-over-year, leading all asset types, with urban offices also up 1.2%. Industrial prices fell by 0.4%, apartments by 1.7%, and hotels by a surprising 9.3%. Overall, commercial real estate deal volume increased by 14% year-over-year, showing a robust market with plenty of investor demand.

🏡 Homebuying demand falling: Pending home sales dropped to a three-month low, while touring activity and Google searches for “homes for sale” have also fallen, indicating that homebuying demand has fallen as mortgage rates continue to inch up.

🚀 K2Space fundraise: The satellite manufacturing startup raised a $500 million round at a $6.8 billion valuation, more than double its $3 billion valuation from last December. The company now has more than $1 billion in signed commercial and government contracts.

🎬 Saturday Night Fever suit: The iconic white three-piece suit worn by John Travolta in the 1977 movie is coming up for auction later this month at Propstore with an estimated value of $400,000. It is one of nearly two thousand lots in the auction worth an estimated $10 million overall.

Wednesday: ADP private employment report released.

Thursday: The first major SpaceX lockup expiration will allow hundreds of millions of shares to be sold, which could cause a price drop.

Friday: U.S. jobs report for July released.

Sunday: Goldin’s Summer TCG Elite auction, featuring dozens of six-figure Pokémon cards.