Cathie Wood’s Ark Invest sold $ 605 million worth of Tesla last month, but has doubled in crypto markets, retail traders and online betting.

Top line

Celebrity stock picker Katie Wood, CEO of investment firm Ark Invest, sold a whopping stake in Tesla last month, dumping more than $ 600 million in stocks to instead spend on recently stranded stocks like Coinbase and Robinhood – doubling its steadfast bullish stance on disruptive technology despite growing skepticism about Wall Street strategy.

Key facts

According to Ark’s daily deal reports, the firm’s funds sold an additional 381,000 shares of Tesla this week, representing a stake of about $ 297 million, bringing total share sales to $ 605.7 million based on market closing prices.

Tesla was by far the top-selling Wood stock throughout September, but it also sold stakes in Singapore-based internet firm Sea, Swiss pharmaceutical giant Novartis and industrial automation company Teradyne for a total of $ 583 million.

Instead, Ark has shifted its focus over the past two weeks to buying new stocks, which have all started trading this year and have not been doing very well, led by a $ 143 million investment in cryptocurrency exchange Coinbase, whose stock has plummeted 34% since April trading debut amid a wider cryptocurrency cataclysm.

In the midst of her buyout on Coinbase last month, Wood responded to “skeptical” investors criticizing the nascent cryptocurrency space by calling bitcoin “much more than just a store of value or“ digital gold, ”and predicted its prices could skyrocket. from the current level of approximately US $ 41,000 to over US $ 500,000 in the next five years.

Ark also invests in a variety of tech stocks, which surged last year at the height of the pandemic’s uncertainty, but have since lost up to 50% of their value, investing roughly $ 320. million in New York-based automation company UiPath; and about $ 160 million each in streaming company Roku, Zoom Video Communications and genetic testing firm Invitae.

Ark declined to comment on its specific deals, but transaction reports show the firm’s biggest purchases this month also include home healthcare company Signify Health, online brokerage firm Robinhood (another cryptocurrency) and bookmaker DraftKings.

Contra

Wood’s strategy, which Ark says focuses on “disruptive innovation,” is increasingly causing skepticism on Wall Street. As of Friday morning, the $ 25 billion Ark Innovation ETF flagship fund appeared poised for the worst quarterly churn in history, with investors cashed in about $ 2 billion in the past three months, according to Bloomberg analysis. Meanwhile, Scion Asset Management – a hedge fund led by investor Michael Berry known to predict the 2007 housing crash – said last month that it has bearish puts, which are placed when investors believe that the value of the asset will fall by $ 30 million. shares of the Ark.

Amazing fact

Despite skyrocketing 90% growth over the past year, the innovative Ark ETF fell 11% in 2021 – up from 18% growth for the S&P 500.

Key background

Tech stocks topped the market rally last year, bringing huge profits to high-tech investors like Ark. However, since spring, accelerated economic growth and the threat of higher interest rates have led the stock market to move away from growth stocks such as technologies for cyclical and value-oriented market segments (such as energy and financial). This rotation peaked on Tuesday, when technology stocks posted their worst one-day decline since March. Cryptocurrencies have not escaped the fallout either, with the market dropping about 25% from an all-time high in May.

Tangent

After a wave of Tesla sales last year, Wood said that Ark loves to trade around stock volatility, using low prices to buy and sell when she thinks prices could fall. “When we feel that analysts are overly excited about stocks, including Tesla, we naturally just take profits because we know we’ll have another controversial opportunity to buy stocks at a lower price.” Wood told CNBC. Despite its recent sales, Wood said earlier this month that she believed Tesla’s share price could skyrocket nearly 300% by 2025.

Further reading

“$ 500,000 in Five Years” – Elon Musk and Tesla Supporter Katie Wood Reveal Huge Price Predictions for Bitcoin and Ethereum (Forbes)

Ark Invest Katie Wood Sells $ 110M Tesla Shares As Insiders Dump Shares Also (Forbes)

Katie Wood’s Tesla stock sales hit $ 297 million this month – this is what she’s buying instead (Forbes)

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