Key Takeaways:
- Cathie Wood’s ARK Invest partially sold COIN and GBTC at the top.
- The firm is knee-deep in losses from its top 5 holdings.
- Tesla didn’t save the day, as the “harder than soft” landing approaches.
YEREVAN (CoinChapter.com) — Cathie Wood, the head of investment firm ARK Invest, sold over 32,000 shares of Coinbase’s COIN stock and over 100,000 shares of Grayscale’s GBTC on Oct. 23.
Don’t worry, ARK still holds COIN and GBTC
In other words, the firm partially sold its holdings right at the top when the markets rallied on high hopes for a Bitcoin spot ETF approval.
To be clear, ARK still holds a sh*tload of COIN, 9.57 million shares with a total worth over $785 million. The firm also still holds a respectable chunk of 5 million GBTC shares, worth approximately $130 million.
Selling at the perceived top is nothing new. However, it is a strategy for people who are not in the game for the long haul and take small profits “gambling” on the daily price swings, in other words, day traders.
It’s all in good fun, of course, but WHY would Cathie Wood treat COIN and GBTC like a day trader? What losses is she trying to offset?
Cathie Wood’s Top 5 holdings tanked
Let’s look at ARK’s portfolio a bit closer. As mentioned, the firm still holds 9.57 million COIN, which is 3.72% of all stocks in circulation and the second largest holding in the ARK portfolio. However, the average cost of ARK’s purchase was over $254 per share. The current Coinbase stock value is $82 per share after the uptrend, which leaves Cathie with a loss of $1.6 billion on COIN alone.
The rollercoaster doesn’t stop there, as ARK is knee-deep in video communications company Zoom (ZM) shares as well. Wood has religiously bought ZM shares since Oct 15, 2020, and holds 7.97 million shares, 3.14% of the supply.
But while everyone and their mother used Zoom during the COVID-19 pandemic, the company’s stock price never recovered after the 2022 market carnage. According to ARK’s official records, the firm bought ZM at an average price of $278 per share. The current ZM price stands at a modest $62, near its all-time lows.
Tesla didn’t save ARK from the “wall of worry.”
The chart above paints a sad picture for ARK Invest, as the firm lost $1.72 billion on ZM in the previous three years. Looks like Cathie is betting on the wrong horse again, as Zoom shares still make the third largest holding in ARK Invest’s portfolio.
Roku Inc., a company that manufactures and sells digital media players, also disappointed Mama Cathie, with an overall loss of $1.4 billion.
Let’s also see if Elon Musk is still ARK’s night in shining armor. The billionaire engineer’s electric car company Tesla brought Cathie Wood an overall win of only $280.5 million, despite the current TSLA stock price doubling from ARK’s cost average.
Interestingly enough, ARK started selling off its TSLA stash parallel to the stock’s price recovery.
Cathie Wood’s Q3 commentary Optimistic despite losses
Overall, ARK Invest saw a net fund outflow of over a billion year-to-date. According to Cathie Wood’s Q3 commentary, the CEO expects an economic landing “somewhat harder than soft,” though not as severe as that associated with the Great Financial Crisis.
She also commented on the “wall of worry” that surrounds the market now, and asserted that it generally “bodes well for equities in the innovation space.” The executive’s tone was overall optimistic, despite the mounting wall of loss.
The strongest bull markets climb walls of worry, a fact that those making comparisons to the tech and telecom bubble seem to forget. No wall of worry existed or tested the equity market in 1999. This time around, the wall of worry has scaled to enormous heights.
Cathie Wood asserted.
