Cathie Wood, CEO of Ark Investment Management, has made significant trades in three prominent companies. These moves came after a similar round of trading on Monday, demonstrating Wood’s active management style.
Ark Innovation ETF, Wood’s flagship fund, sold 313,509 shares of DraftKings, the online sports gambling platform worth $6.9 million. This follows a nearly identical sale in dollar terms on Monday. Despite DraftKings’ stock surging 92% year-to-date and 46% over the past 12 months, it now ranks as the 10th largest holding in Ark Innovation, falling behind Shopify and Teladoc.
Ark funds also purchased 147,317 shares of Coinbase Global, the largest US cryptocurrency exchange, valued at $7.6 million. This comes after Monday’s acquisition of $8.5 million in Coinbase shares. Although Coinbase’s stock has declined by 60% over the past year, it has rebounded 37% in 2023, thanks to Bitcoin’s recovery. Coinbase now ranks as the fourth-largest holding in Ark Innovation, surpassing Block.
In addition, Ark funds acquired 110,316 shares of Teladoc Health, a leading phone/video healthcare provider, worth $2.9 million. This follows the purchase of $3.9 million in Teladoc shares on Monday. Despite Teladoc shares falling 33% over the last 12 months, they have risen 8% year-to-date, making the company the ninth-largest holding in Ark Innovation.
Wood’s Performance and Strategy
Wood’s investment performance over the past year has been underwhelming, as her focus on young technology stocks has faltered. Ark Innovation has dropped 31% during this period and 78% from its peak in February 2021. However, the fund has recovered 11% so far this year, in line with the broader rebound in tech stocks.
Known as “Mama Cathie” to her fans, Wood defends her strategy by emphasizing her five-year investment horizon. Nevertheless, the five-year annualized return of the $6.7 billion-asset Ark Innovation was negative 1.22% through May 2, compared to the positive 11.28% for the S&P 500. This performance falls short of Wood’s goal for annualized returns of 15% over five-year periods.
Ark Innovation experienced a net investment outflow of $172 million during the five days through May 1. Still, it saw a $257 million inflow over the last year, according to ETF research firm VettaFi.
As Wood continues to make bold moves in her funds, entrepreneurs and investors alike will be watching her strategy and its impact on the performance of Ark Innovation.