Is Tesla losing favor? Ark Invest shifts focus to cryptocurrency market, betting on Coinbase and RobinhoodArk Invest is shifting their focus to the cryptocurrency market and betting on Coinbase and Robinhood. This move may suggest that Tesla is losing favor.
Ark Invest reduced its holdings in Tesla over the past week. Meanwhile, the tech-focused investment management firm has turned to the cryptocurrency industry, acquiring significant stakes in Coinbase and Robinhood.
The investment management firm holds stocks in several cryptocurrency companies through its exchange-traded funds (ETFs).
Crypto exchanges such as Coinbase experienced a downturn earlier this month, but their stock prices have rebounded over the past week.
Ark sold nearly $16 million worth of Tesla shares over the past week through its Innovation ETF and Next Generation Internet ETF, respectively.
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Although the company remains a significant investor in Tesla, the move to partially divest from the electric vehicle manufacturer reflects a cooling view of tech stocks.
Tesla’s stock has risen about 140% in the past year, but several institutional investors are pessimistic about its near-term prospects.
Barclays analyst Dan Levy downgraded Tesla shares from overweight to equal weight in a report to investors on Wednesday.
“We believe recent strength may be explained by thematic retail trading themes in which AI is a key component…While we are not surprised by the rebound, we see merit in taking profits,” the report said.
Similarly, Morgan Stanley analyst Adam Jonas also downgraded Tesla shares to equal weight on Thursday.
In addition to Tesla, Ark Invest also sold several other blue-chip tech stocks this week.
For example, on Friday, it sold 78,676 shares of Shopify, worth more than $5 million. In addition, Ark Invest reduced its exposure to the online sports betting company DraftKings.
While partially exiting some major tech companies, Ark Invest has also increased its investments in the cryptocurrency space.
The firm holds significant stakes in several U.S. cryptocurrency companies and its ARKW fund has good exposure to BTC through its large investment in the Grayscale Bitcoin Trust.
Ark’s most significant holdings in the crypto industry are Jack Dorsey’s Block Inc investment and the crypto exchange Coinbase, of which the firm is the fourth-largest shareholder.
Earlier this month, news of the SEC’s lawsuit against Coinbase hit the exchange’s stock price. Ark Invest took advantage of the opportunity and bought 419,324 shares of the company’s stock, as Coinbase’s stock price plummeted by as much as 21% in a single day.
The exchange’s stock price rebounded somewhat after hitting a low of $50.02 on June 6th.
On Friday, the stock closed at $61.47, showing significant growth over the past ten days.
In addition to buying Coinbase stock at a low, Ark Invest’s ETF also purchased over one million shares of Robinhood stock this week, worth $15.39 million.
Given that they also sold Tesla stock at the same time, this move indicates that the company is more bullish on financial technology investments than on the broader tech sector.
Like Coinbase, the SEC’s enforcement action also affected Robinhood’s stock price, but its market performance was not closely related to the overall cryptocurrency market.
On Thursday, Robinhood announced that it will acquire credit card platform X1 to expand beyond its core business areas. This $95 million deal will allow Robinhood to offer credit to its customers.
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