Cathie Wood’s Ark Invest seems to be, in some ways, on shaky ground.
Medha Singh and Sruthi Shankar report today for Reuters on some recent acquisitions by the fund, which is estimated to have lost a staggering 43% over the year, in comparison to a 7.7% decline by Standard & Poor’s 500 index. For reference, after doubling and then tripling in value since the onset of coronavirus in the spring of 2020, ARKK is just about right back to where it was.
Recently, Singh and Shankar report, Ark bought volumes of shop of Shopify, Zoom and Roku with an eye toward course correction.
“Over the week, ARK bought 100,642 shares of e-commerce firm Shopify Inc, 329,073 of Zoom, 739,082 of gaming site Roblox and 575,648 of streaming device maker Roku,” the duo write. “Wood’s shopping spree came after a shocking subscriber loss at Netflix Inc triggered a selloff in stocks that thrived during COVID-19 lockdowns.”
Ark’s fund group, including targeted robotics, genomics and innovation ETF options, was the darling of analysts’ dashboards over the past year or so. But ARKK’s steep decline is causing some to rethink their investment.
One bright spot is in Ark’s acquisition of a 10% stake in Tesla.
This is a point where the company is going to hold course.
“Last week, Wood reiterated her bullish stance on the fund’s biggest holding, Tesla Inc.,” write the Reuters reporters in above coverage. “The electric-car maker’s stock is the only one among the fund’s top 10 holdings that has climbed over the past year. The other nine – including Roku, Zoom and Teladoc Health – have plunged between 22% and 62%.”
Brian Wang at Next Big Future writes about Ark expectations April 15.
“ARK Invest has updated its Tesla model and it provides new expected value per share of $4,600 in 2026,” Wang writes. “Ark Invest is famous for correctly predicting Tesla would run to over $4000 three years before they did. They correctly called a greater than 10X move. This projection does not factor in scenarios where Tesla has a significant and profitable energy business or a significant Tesla bot business.”
Look for ARKK to go how TSLA goes, to some extent, and perhaps move higher on new acquisitions.
