u/Dull_Needleworker698

We are now at (or will soon arrive at) the part in the game where we hope VCX will issue more shares. Big ups to u/BurnsVail and others who have been tracking the sales out of Flagship.

Why is this important? Because as of today VCX is trading at roughly a 10x premium to NAV, assuming a fresh NAV along the lines of $25 per share. When a closed-end fund sells new shares at a price above current NAV, each new share brings in cash that exceeds the per-share claim on existing assets, so total assets rise faster than share count -- making the issuance accretive to existing shareholders. In other words, existing shareholders can make a lot of money if the new shares are issued at a significant premium to NAV. 

There are currently 28.3 million shares of VCX. If Fundrise decides to do a primary issuance for an additional 10%, that would be 2.83 million new shares. At the current share price of say $250, that would be an additional $708 million (!) in cash flowing into VCX. Once the 2.83 million shares were sold, the NAV would jump from $25 to $45. I guess we should factor in fees as well. I’ll put the Claude math in the comments. 

• Is there demand for an additional 2.83 million shares? 
  • Yes, Flagship just off-loaded 2.73 million shares and it hasn’t dented the enthusiasm, with the price at a significant premium to NAV.

   

• Does Fundrise have the ability to choose and get access to the best private companies to invest another $708 million? 
  • Based on their track record, I am confident they can.

    

• Is there some magic number of shares that Fundrise should sell to maximize their profit? 10%? 20%? More? 
  • I don’t know. Is there dilution-risk at some point to existing shareholders?
• How long would it take them to issue new shares? Could they sell an additional 10% before lock-up ends in Sept? 
  • I assume they could sell them within a couple months without denting the price, as that’s exactly what Flagship just did and it looks like the pre-IPO frenzy is increasing.
• What happens if the price of VCX drops after September 16th? 
  • Irrelevant, assuming the new 2.83 million shares are sold before lock-up expires. The increased NAV would already be set.

   

• What are the worst case scenarios of issuing more shares? 
  • VCX price could precipitously drop to below NAV – existing shareholders would be diluted AND their original holdings would be worth less. Very unlikely. 
  • Fundrise can’t access enough new promising private companies or buy into new funding rounds for existing portfolio companies to soak up the new $708 million. Their alternative would be to hold the funds in less lucrative options until opportunities arose. I suppose they could also issue the excess cash to existing shareholders as dividends, if sentiment really turned against AI, etc. Although knowing Ben’s contrarian streak, I think he would zig when others were zagging.

So what’s the play for us if they issue new shares? I don’t think it changes much. If you were lucky/smart enough to acquire restricted shares, sit back and enjoy the ride. If the price dips significantly, consider picking up more. I’m sure those that are comfortable with options can work some serious magic here, but I certainly don’t advocate that for beginners. Totally open to all ideas on how to profit from Fundrise’s hard work.

Big congrats to everyone who correctly identified Flagship as a way to keep rolling with the VCX gains!

I'd love to see an explainer from Fundrise on the mechanics and calculations...perhaps once all the unrestricted VCX shares held by Flagship are sold.

Here is more definitive reporting of the $900B valuation round:

"On April 30, according to reporting from Bloomberg, TechCrunch and others, Anthropic gave investors 48 hours to submit allocations for the round, which would value the company at more than $900 billion. The board expects to make a decision at a meeting in May, and the raise is described as likely the company’s final private round before going public."

...

"Anthropic’s annualized revenue grew from $1 billion in December 2024 to $30 billion by the end of March 2026. That is more than 10x growth, sustained, for three consecutive years. No enterprise software company in recorded history has compounded at this rate at this scale. Salesforce did not do it. Snowflake did not do it. ServiceNow did not do it. Even OpenAI, the obvious comparable, hit roughly $25 billion in ARR over a similar timeline, putting Anthropic ahead of the company many analysts assumed had won the AI race outright."

Whole article is worth a read.

If I recall Omni was a relatively small holding in VCX, but Ben seems excited so maybe they bought more. More than doubled their valuation from a year ago.

Just saw an unexpected 13.86% unpaid dividend in my Growth eREIT account.

I will accept this munificence.

No pay wall