Fundrise Innovation Fund LLC (VCX) plummeted 33.59% during intraday trading on Friday, extending significant losses for the closed-end fund that focuses on pre-IPO technology investments.

The sharp decline follows multiple negative catalysts. Citron Research disclosed a short position in the company, while regulatory issues surfaced after Fundrise Advisors LLC was fined by U.S. securities regulators for paying financial influencers to promote products without proper disclosures. Additionally, the fund had been trading at unsustainable valuations, having reached a peak of 31 times its net asset value earlier in the week, creating an extreme premium that analysts consider unwarranted.

Further pressure came from an insider selling plan, with an officer proposing to sell approximately $23.71 million worth of shares. Market observers note the trading action reflects a broader cooling of IPO mania and speculative frenzy around pre-IPO investments, with the fund's significant holdings in companies like SpaceX contributing to volatility as investors reassess underlying value. A trading halt notice was also issued for the fund during the session.