A Tour Through History's Most Entertaining Price Anomalies

MicroStrategy's bitcoin holdings and a tech investment fund are commanding extraordinary premiums in U.S. markets, highlighting unusual price anomalies reminiscent of past market distortions. MicroStrategy shares are trading at more than double the market value of their main asset -- bitcoin holdings -- while closed-end fund Destiny Tech100 recently traded at 11 times its net asset value, down from 21 times earlier in 2024.

Similar market irregularities have emerged throughout history. In 1923, investor Benjamin Graham profited from a disconnect between DuPont and General Motors shares. During the 1929 bull market, closed-end fund Capital Administration Co. traded at a 1,235% premium to its net asset value. WSJ adds: The PalmPilot during the 1990s and early 2000s was a hand-held device and personal assistant that came with a touch-screen display and a stylus. Palm was the biggest maker of hand-held computer devices, with 70% market share, and it held its initial public offering in March 2000, about a week before the Nasdaq Composite Index's peak during the dot-com bubble.

Palm's shares jumped 150% on their first day of trading, giving Palm a stock-market value of about $53 billion. Palm was still 94%-owned by parent 3Com at the time. Yet on Palm's first day of trading, 3Com's shares fell 21%.

The funny part: According to the stock market, 3Com was worth about $23 billion less than the value of the Palm shares that 3Com owned. This made no sense, yet the valuations remained out of whack for months. In time, both stocks came down to earth, sanity prevailed and the world eventually moved on to smartphones.

Read more of this story at Slashdot.