Ark Invest recently made headlines by selling 74,291 Coinbase shares, totaling $20.8 million across three of its exchange-traded funds. This move follows the firm’s previous sale of over $100 million worth of Coinbase shares when the price of COIN soared to new yearly highs. The shares were sold from the Innovation ETF (ARKK), Next Generation Internet ETF (ARKW), and Fintech Innovation ETF (ARKF) at varying values. This decision was made in accordance with Ark Invest’s strategy to keep any single holding below 10% of an ETF’s portfolio to ensure diversification.
Coinbase is currently the largest holding in ARKK, ARKW, and ARKF ETFs, with weightings of 10.6%, 10.9%, and 12.7% respectively. The market value of ARKK’s Coinbase holdings sits at $826.6 million, while ARKW and ARKF hold investments valued at $188.9 million and $147.9 million. Despite these recent sales, ARKK, ARKW, and ARKF have seen significant gains over the past year, with increases of 29.5%, 58.2%, and 59.5% respectively.
Stock Sell-Off of Jack Dorsey’s Block and Robinhood
In addition to the sale of Coinbase shares, Ark Invest also divested $7.9 million of Jack Dorsey’s Block shares and $31.5 million of Robinhood (HOOD) stock on Monday. This follows a previous sale of $5.76 million of HOOD stock on Friday. The sell-off included large quantities of Robinhood shares from ARKK, ARKW, and ARKF, signaling a shift in the firm’s investment strategy.
Coinbase stock closed at $279.71 on Monday, reflecting a significant increase for the day and a 25% rise over the past week. Year-to-date, COIN has surged by 62%, despite trading 18% below its all-time high. The recent rally in Coinbase shares coincided with a broader uptick in the cryptocurrency market, particularly with Bitcoin rising above $70,000. As of the latest data, Bitcoin is trading at $70,500, representing a notable increase over a 24-hour and one-week period.
The decision to sell off shares in Coinbase and other companies aligns with Cathie Wood’s short-term pessimistic outlook on crypto stocks. As a result, Ark Invest has opted to divest from certain positions in anticipation of potential market fluctuations. However, reports suggest that the firm is contemplating an investment in the upcoming Reddit IPO, indicating a strategic shift in its investment approach.
Overall, Ark Invest’s recent stock sell-off underscores the dynamic nature of the investment landscape, with the firm adapting its portfolio to navigate changing market conditions and ensure optimal diversification.
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