Cathie Wood, the prominent investor and portfolio manager, has a strategic approach when it comes to Tesla Inc.’s stock. Similar to Wall Street’s strategy, Wood believes in buying on dips and selling on rallies.
Wood’s flagship ARK Innovation exchange-traded fund (ETF), ARKK, recently acquired 94,733 shares of Tesla, one of the leading electric-vehicle giants. At the closing price on that day, the shares totaled approximately $21.53 million.
Within the ETF, Tesla holds the second-largest position with a weightage of 7.9%. The only stock ahead of Tesla is Coinbase Global Inc., with a weightage of 9.28%.
Although the ETF had been reducing its stake in Tesla from mid-October 2023, it reversed its approach in December and began buying again. On December 20, amidst a 3.9% decline in Tesla stock, the ETF purchased 93,965 shares valued at $23.22 million. Similarly, on January 3, when the stock decreased by 4%, the ETF acquired 91,194 shares worth $21.75 million.
Tesla’s stock faced a setback on Thursday, plunging by 2.9% to a two-month low. The decline was attributed to rental-car company Hertz Global Holdings Inc.’s decision to downsize its EV fleet due to weak demand, which placed pressure on EV stocks.
The ARK Innovation ETF’s previous sale of Tesla shares occurred on October 18 when the stock had already gained 97% year-to-date. In comparison, the S&P 500 index had risen by 12.4%.
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The ARK Innovation ETF: Embracing Disruptive Innovation
The ARK Innovation ETF is a powerhouse in the investment world, boasting an impressive $8.12 billion in net assets as of Nov. 30. This forward-thinking fund specializes in investing in companies that bring disruptive innovations to the table, revolutionizing the way we live and work.
While the ETF has been grabbing headlines for its recent financial moves, it remains steadfast in its mission to identify groundbreaking technologies and products that have the potential to reshape the world as we know it.
One notable decision by the ARK Innovation ETF is its ongoing trimming of its stake in Coinbase, a leading cryptocurrency exchange. Coinbase’s stock has experienced a meteoric rise amidst the anticipation surrounding the approval of spot bitcoin ETFs. Recognizing the fervor in cryptocurrency markets, the ETF made a calculated move to sell 26,301 shares of Coinbase, valued at a staggering $3.71 million.
However, it’s worth noting that the ETF’s focus extends beyond the crypto realm. In fact, since December 20th, when the ETF first started purchasing Tesla’s stock, it has sold a total of 604,074 shares valued at an impressive $96.47 million. This diversification strategy highlights the fund’s commitment to capitalizing on various disruptive technologies and staying one step ahead of the curve.
It’s crucial not to make assumptions about Coinbase’s stock benefiting from the bitcoin ETF, according to analysts who closely follow these developments. While Coinbase’s stock experienced a 5% slump in morning trading on Friday, it has still soared an astounding 182% over the past 12 months. In comparison, bitcoin has seen a 136% surge, while the S&P 500 has relatively modestly advanced by 19.9%.
Considering the impressive numbers, it’s no surprise that the ARK Innovation ETF itself is enjoying significant growth. The ETF has gained an impressive 34.4% over the past year, solidifying its status as a leading player in the investment landscape.
In conclusion, the ARK Innovation ETF continues to make waves with its strategic investments in disruptive innovation. With a focus on identifying groundbreaking technologies and products, this forward-thinking fund remains at the forefront of reshaping our world.