Famed investor Cathie Wood bought shares of two major companies and sold shares of two others on November 4, continuing her two-sided trading pattern.
The chief executive of Ark Investment Management acquired 1,682,361 shares of online sports betting DraftKings (DKNG) through various Ark funds. That pussy was valued at $19 million as of Friday’s close.
DraftKings fell 28% on Friday, its biggest drop since it started trading in 2019, after the company said user growth slowed in the third quarter.
Wood said in 2022 that the demise of the young, “disruptive” tech companies she favors has opened up buying opportunities. DraftKings is down 59% so far.
But Wood apparently doesn’t see Nvidia’s (NVDA) pedigree as a buying opportunity. Ark Innovation ETF (ARKK) on Friday dumped 167,914 shares of the giant semiconductor maker. The shares were valued at $23.8 million at Friday’s close.
Nvidia is down 52% so far in 2022. Chip stocks have suffered from supply chain bottlenecks and declining demand this year.
Ark Funds Acquired 161,565 Shares of Video Streaming Company Roku (ROKU) , valued at $8 million as of Friday’s closing. It is down 78% so far.
Ark Fintech Innovation ETF (ARKF) 277,519 shares of online stock brokerage sold Robinhood Markets (CAP) valued at $3.4 million as of Friday’s close.
It has lost 30% so far this year but is up 11% in the past month. Wood bought Robinhood for $1.7 million on November 1. It is therefore difficult to determine what she thinks of this stock.
Subpar performance from Wood
Ark’s ETFs have fallen this year as their technology stocks suffered from weak gains. Wood has defended herself by noting that she has a five-year investment horizon.
And the five-year track record of its flagship Ark Innovation ETF could indeed offer investors comfort until May 9. The fund’s five-year return has surpassed that of the S&P 500 to date. But Ark Innovation’s five-year annualized return was just 1.5% until Nov. 4, well behind the 9.75% return of the S&P 500.
The fund’s performance is also well below Wood’s target for an annual return of 15% over five-year periods.
Ark Innovation is down 64% so far this year and is 78% lower than its February 2021 peak.
The fund’s underperformance of $6.9 billion may finally drive investors away. According to VettaFi, an ETF research firm, Ark Innovation suffered net outflows of $486 million in the three months through Nov. 4. But it still has recorded inflows of $1.26 billion so far.
Cathie Wood gets a lot of criticism
You may be wondering why so many investors have stuck with Wood despite her mediocre returns. The fact that she’s had one spectacular year behind her certainly helps. Ark Innovation ETF shot up 153% in 2020.
Wood has also become something of a rock star in the investment world, regularly appearing in the media. She is clearly intelligent and articulate and explains financial concepts in a way that novice investors can understand.
Still, Wood has its detractors. On March 29, Morningstar analyst Robby Greengold gave a scathing critique of Ark Innovation.
“ARKK shows little sign of improving risk management or ability to successfully navigate the challenging territory it explores,” he wrote.
Wood refuted Greengold’s points in an interview with Magnifi Media by Tifin. “I do know that there are such companies [Morningstar] who don’t understand what we’re doing,” she said.