Did Ark invest buy Coinbase?
ARK Investment Management, led by widely followed portfolio manager and CEO Cathie Wood, bought $246 million worth of shares in the newly listed cryptocurrency exchange Coinbase Global on Wednesday. Barron'sCathie Wood's ARK Funds Bought Coinbase Stock on Its First Trading Day
Is Coinbase a stock?
Coinbase stock: What you should know about the crypto exchange that just went public. Shares shot up at first, only to slowly make their way down. ... Coinbase, one of the largest and most popular cryptocurrency exchanges in the world, went public Wednesday, selling its shares for the first time on the Nasdaq exchange. CNETCoinbase stock: What you should know about the crypto exchange that just went public
16 April, 2021 - 11:16pm
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While the eight ARK Invest funds hold stakes in dozens of companies, Wood isn't afraid to make some big bets on specific stocks either. Chinese e-commerce giant JD.com, for example, is held in four ARK ETFs for a total investment of $415 million, yet she has invested over $1 billion in nine separate companies. In three of them, she's gone really big, investing $2 billion or more.
Below, we're going to focus on those three, and also see how they're viewed by the many investors at Motley Fool CAPS. Hot money managers come and go, but using the wisdom of crowds to find investment options can also prove a rewarding strategy.
CAPS aggregates the opinions of tens of thousands of players to assign ratings to each stock based on its perceived likelihood of outperforming the market, from one to five stars, with five being best. Players are also rated based on how well their stock picks perform, with those earning higher ratings having more influence on a stock's rating.
In other words, if you're an investor with a great stock-picking track record on the platform, CAPS gives your opinion more weight.
Virtual care leader Teladoc Health (NYSE:TDOC) suffered something of a setback when Amazon (NASDAQ:AMZN) announced its intention to enter the telehealth market this year, but maybe the media made more out of that than was warranted.
Over the years, Amazon has launched numerous products and services that were promised to disrupt whatever market they were in, but that ultimately flamed out. Fire phone, anyone? How about A9 Search, Auctions, PayPhrase, or Payments? Are you using Amazon Wallet?
When the tech and e-commerce giant is successful, it tends to be wildly so, but Amazon also throws a lot of things at the wall to see what sticks, and Teledoc has already established a commanding presence in virtual health.
Due to the pandemic, Teledoc's worldwide revenues doubled in 2020, and we can anticipate that its services will remain popular even after the threat of COVID-19 recedes, if only because virtual visits beat sitting in an overbooked doctor's office waiting room for hours waiting to be seen.
Teladoc's massive $18.5 billion acquisition of Livongo Health should also bolster its bottom line, as Livongo collects data on patients and, using artificial intelligence systems, "nudges" them to accept personalized health coaching and information.
Nearly 1,200 CAPS players have rated Teladoc, with 99% believing it will outperform the market, giving it a top 5-star rating. Its share price may be down 42% since Amazon's announcement, but there appear to be good reasons for the bullishness that Wood and the CAPS players are expressing about its prospects.
Mobile payments processor Square (NYSE:SQ) is held in three ARK ETFs, and it's easy to see why Wood likes this company. Although it faced some headwinds from the COVID-19 pandemic as businesses closed their doors, a reopening U.S. economy is poised to get that aspect of its operations growing again. Moreover, it has expanded its offerings, and now even includes a federally chartered bank, opening up even more potential opportunities to expand the products and services it offers.
Last year, it also faced the potential of a big-name company entering its space as a competitor when Apple (NASDAQ:AAPL) acquired Canadian start-up Mobeewave. That company's tech promises to turn every iPhone into a mobile payments terminal. So far, though, that has proved to be a mere blip on the radar for Square.
Shares might be down 13% from their recent high, but Square stock is up 386% over the past year. CAPS All-Star player Har1en says the fintech stock is a "Great player in the new cashless economy...[and] younger firms like Square are better positioned than the major financials to change and move with the times."https://caps.fool.com/Ticker/SQ/Commentary/Page1.aspx
Tesla (NASDAQ:TSLA) is by far Wood's biggest investment and is held in three ETFs where it is the largest position in each, amounting to almost 11% of ARK's total holdings. But the divergence in Wall Street analysts' sentiments about the electric car maker is reflected in its CAPS rating. Players have overall assigned it only two stars, suggesting they don't think the company will outperform the market for the foreseeable future. (Author's note: I also have an underperform rating on CAPS for Tesla.)
Investors' rationale for that view probably isn't based on a belief the EV leader is a bad company. Rather, they are likely concerned that its stock price is not tethered to its business fundamentals. (That's my reason for believing it will underperform.) Although China promises to be a big market for Tesla's cars, it faces a large and growing group of competitors there, and Warren Buffett-backed EV maker BYD just announced that it delivered over 16,300 cars last month, more than Nio (NYSE:NIO) and Xpeng (NYSE:XPEV) combined.
Tesla also had some big numbers released recently: It delivered almost 185,000 cars in the first quarter, far exceeding analysts' expectations.
However, on the subject of Tesla's almost $700 share price, Roth Capital analyst Craig Irwin had this to say on CNBC this week: "People are just assuming that Tesla has no competition when they put this kind of lofty valuation on the company." He pegs its value closer to $150 per share.
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16 April, 2021 - 11:16pm
Cathie Wood-led Ark Investment Management on Thursday snapped up another 3,41,186 shares, worth about $110 million, of the biggest U.S. cryptocurrency exchange desk Coinbase Global Inc (NASDAQ:COIN), on the second day of trading after its debut on NASDAQ through a direct listing.
Coinbase shares lost some of their debut steam and closed 1.68% lower at $322.75 on Thursday, giving the cryptocurrency exchange a market cap of $63.5 billion. The stock opened higher at $358 but immediately pulled back to $323 levels in the early morning trade and remained volatile the rest of the day before closing significantly lower.
Three of the investment management firm’s flagship funds made the buys on Thursday. The Ark Fintech Innovation ETF (NYSE:ARKF) added 33,092 shares of the cryptocurrency company, representing about 0.253% of the ETF.
The Ark Innovation ETF (NYSE:ARKK) added another 282,894 shares, representing about 0.36% of the ETF and the ARK Next Generation Internet ETF (NYSE:ARKW) bought 25,200 shares, representing about 0.116% of the ETF.
Wood’s firm, which counts Square Inc (NYSE:SQ) among the top three stocks in three of its funds, however, sold 409,241 shares worth about $107.66 million based on the company’s closing price of $263.08 a share on Thursday.
ARKF sold 41,859 shares of the fintech company, representing 0.25% of the ETF. ARKK sold another 367,382 shares, representing 0.38% of the ETF.
Also, Ark added to two ETFs 30,79,032 shares, worth about $123.16 million, of the autonomous semi-truck maker TuSimple Holdings (NASDAQ:TSP), which made its market debut on Thursday and shares closed 3.37% lower at $40.
The Ark Innovation ETF (NYSE:ARKK) bought 2,350,496 shares of the California-based self-driving truck maker, representing about 0.365% of the ETF. The ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) bought 728,536 shares, representing 0.85% of the ETF.
Here are four other prominent trades made by the hedge fund on Thursday:
Trades For Ark Space Exploration & Innovation ETF (BATS:ARKX):
Lockheed Martin Corp (NYSE:LMT): Sold 4,324 shares of the No.1 US defense contractor, representing about 0.25% of the ETF.
Lockheed shares closed 0.50% higher at $390.63 on Thursday. It has a 52-week high of $417.62 and low of $319.81.
Virgin Galactic Holdings Inc (NYSE:SPC): Bought 42,800 shares of the spaceflight company, representing about 0.15% of the ETF.
Virgin Galactic shares closed 13.63% lower at $23.06 on Thursday. It has a 52-week high of $62.80 and low of $14.21.
Trades for ARKQ:
Lockheed Martin Corp (NYSE:LMT): Sold 26,065 shares, representing about 0.299% of the ETF.
Alphabet shares closed 1.93% higher at $2,285.25 on Thursday. It has a 52-week high of $2,296 and low of $1,205.
Synopsys Inc (NASDAQ:SNPS): Sold 36,104 shares of the electronic design automation company, representing about 0.277% of the ETF.
Synopsys shares closed 1.37% higher at $262.13 on Thursday. It has a 52-week high of $300.91 and low of $142.86.
Photo by Marco Verch on Flickr
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