Cathie Wood Watch: Ark Keeps Riding Tesla, Sells Shopify

Wood's flagship Ark Innovation ETF has tumbled 28% during the last 12 months, but has rebounded 14% year to date.

Cathie Wood, chief executive of Ark Investment Management, traded some of her top stocks Tuesday.

All the valuations below are as of Wednesday’s close.

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Ark funds bought 190,976 shares of electric vehicle titan Tesla  (TSLA) - Get Free Report valued at $29.4 million. That’s bigger than Wood’s usual trades, which generally top out around $20 million.

She was likely trying to take advantage of the stock’s 12% drop since a weak earnings report last Wednesday.

Wood is a major evangelist for Tesla, the biggest holding in her flagship Ark Innovation ETF  (ARKK) - Get Free Report. She has frequently called its declines buying opportunities and called her occasional sales of the stock profit-taking.

The shares have jumped 29% so far this year but have slumped 46% over the past 12 months. Wood predicted last week that the stock could hit $2,000 by 2027. It recently traded at $159.40.

Also Wednesday, Wood’s Ark Innovation ETF sold 223,048 shares of e-commerce host Shopify  (SHOP) - Get Free Report valued at $10.3 million.

On Monday, Ark funds dumped $23.9 million worth of Shopify and last Thursday it shed $35.5 million worth. But Shopify is still the eighth biggest holding in Ark Innovation.

The company’s revenue surged 26% in the fourth quarter, as merchants continue to grow their online sales offerings. But Shopify’s net loss widened by 68%. Its stock has climbed 37% year to date and 14% over the past 12 months.

Wood Sells DraftKings, Exact Sciences

Ark Next Generation Internet ETF  (ARKW) - Get Free Report unloaded 209,943 shares of online sports gambling platform DraftKings  (DKNG) - Get Free Report, valued at $4.3 million.

DraftKings stock has skyrocketed 84% year to date and 51% in the past year and amid strength in the sports-gambling market. It’s the eighth biggest holding in Ark Next Generation ETF.

Finally, Ark funds jettisoned 106,942 shares of Exact Sciences  (EXAS) - Get Free Report, valued at $6.7 million.

Exact Sciences is a medical diagnostics provider famous for its Cologuard at-home colon cancer test. The stock has ascended 28% thus far in 2023, buoyed by strong earnings, and 1% over the last 12 months.

Ark has unloaded more than 4 million shares of Exact Sciences since Jan. 1. But it’s still the sixth biggest holding in Ark Innovation ETF.

Wood’s Lagging Returns

Meanwhile, Wood’s performance hasn’t exactly lit the investment world on fire over the past year, as her young technology stocks have slumped. Ark Innovation has descended 28% during that period and 78% from its February 2021 peak.

Nonetheless, the fund has bounced back 14% so far this year, as tech stocks have rebounded in general.

Mama Cathie, as Wood is known to her fans, defends her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of $6.6 billion-asset Ark Innovation was negative 1.04% through April 26, compared with positive 10.68% for the S&P 500.

The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.

Ark Innovation suffered a net investment ouflow of $245 million during the five days through April 26, and enjoyed a $391 million inflow over the last year, according to ETF research firm VettaFi.