The Fundrise Innovation Fund LLC (VCX) experienced a 24-hour plunge of 7.26%, continuing a period of extreme volatility for the closed-end fund that provides retail investors exposure to pre-IPO technology companies like SpaceX and Anthropic.

The sharp decline appears driven primarily by Citron Research's disclosure of a short position in the company. The prominent short-selling firm cited regulatory issues, claiming Fundrise Advisors LLC was fined by U.S. securities regulators for paying financial influencers to promote Fundrise products without proper disclosures. Additionally, the fund has been trading at unsustainable valuations, having reached a peak of 31 times its net asset value earlier in the week, creating what analysts consider an extreme premium.

Market observers note the trading action reflects a broader cooling of IPO mania and speculative frenzy around pre-IPO investments. The fund's significant holdings in companies like SpaceX, which is reportedly preparing for its own IPO, have contributed to the volatility as investors reassess the fund's underlying value versus its market price.