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Cathie Wood Watch: Ark Bulks Up on Tesla and Zoom Video

Asset manager Cathie Wood may see Tesla stock as a good value now, given its 41% drop year to date through Tuesday.
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Renowned investor Cathie Wood, chief executive of Ark Investment Management, on Tuesday bought a major electric vehicle maker for a second day. She also purchased some other familiar names. 

All valuations listed below are as of Tuesday’s close.

Ark funds snagged 26,081 shares of electric vehicle titan Tesla  (TSLA) - Get Tesla Inc. Report, valued at $16.4 million. Wood for some months had been selling Tesla shares, but she had said the sales reflected profit-taking and that she still believed in the Austin company.

Wood may see Tesla stock as a good value now, given its 41% drop year to date through Tuesday. An Ark spokeswoman said the firm doesn’t comment on daily trading activity.

Tesla is the second biggest holding for Wood’s flagship Ark Innovation ETF  (ARKK) - Get ARK Innovation ETF Report, and was No. 1 until last week. Now, videoconferencing service Zoom Video Communications  (ZM) - Get Zoom Video Communications Inc. Report occupies the top spot.

Ark Innovation snatched shares Zoom Video shares for the second day in a row — to the tune of 19,015 shares, valued at $1.8 million.

Ark funds also snapped up shares of Coinbase  (COIN) - Get Coinbase Global Inc Report, the U.S.’ largest cryptocurrency exchange, for the second consecutive session. They bought 51,049 shares, valued at $3.1 million.

Ark funds bought 271,733 shares of video-streaming platform Roku  (ROKU) - Get Roku Inc. Report, valued at $21.5 million. 

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And Ark purchased 222,321 shares of financial-services company Block (formerly Square)  (SQ) - Get Block Inc. Class A Report, valued at $16.9 million.

On the selling side, Ark funds dumped 563,354 shares of Spotify Technology  (SPOT) - Get Spotify Technology S.A. Report, the audio-streaming company, valued at $42.7 million.

Trailing the S&P 500

As Ark funds have tumbled in recent months, Wood has defended herself by noting that she has a five-year investment horizon.

And the five-year track record of Ark Innovation could indeed give investors comfort until May 9. The fund’s five-year return beat that of the S&P 500 until then. But the five-year annualized return of Ark Innovation totaled 8.76% through May 24, behind the S&P 500’s 12.39% return.

Ark Innovation has slumped 57% so far this year, as Wood’s young, disruptive technology companies have hit the skids. And it’s down 75% from its February 2021 peak. Raging inflation and soaring interest rates have helped put the kibosh on tech stocks.

Still, Wood’s investors aren’t deserting her. Ark Innovation enjoyed a net inflow of $1.4 billion so far this year, as of the week of May 16, The Wall Street Journal reported.

Morningstar’s View

On March 29, Morningstar analyst Robby Greengold had issued a scathing critique of Ark Innovation.

“ARKK shows few signs of improving its risk management or ability to successfully navigate the challenging territory it explores,” he wrote.

Wood countered Greengold’s points in a recent interview with Magnifi Media by Tifin. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said.