This may be the biggest crossover since Batman vs. Superman.
Cathie Wood is one of the most high profile investors active today, with her Ark Investment Management (ARKK) making waves in the market.
One of Ark's biggest bets has been on electric vehicle maker Tesla (TSLA).
Wood and Ark have been enriched by Tesla's strong performance, with its market cap breaking the $1 trillion valuation mark.
Ark still sees plenty of room to run for Tesla and recently increased its 2026 target price for the company.
Tesla stock is expected to trade at $4,600 in 2026, according to the latest research report from Ark Investment Management. This is almost five times the price at which the stock of Elon Musk's company is currently trading.
Now, Wood and Ark have put their money where their mouth is and are backing Tesla and its mercurial CEO Elon Musk.
While Tesla remains the crown jewel, Musk's investment portfolio just got heavier, after social media company Twitter agreed to his $44 billion takeout offer.
While some institutional investors may balk at Musk putting such a big potential distraction on his plate, don't count Cathie Wood amongst the doubters.
Cathie Wood Praises Musk's Latest Project
Elon Musk is on track to take over Twitter in a fulfilment of a dream that is at least a month old.
Musk, naturally, took to Twitter to celebrate.
"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," Musk said.
"I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.
Cathie Wood's response was simple, but it speaks volumes about her trust in Musk.
But this is also a slight retreat from her comments just two weeks ago.
Wood told CNBC's Bob Pisani during an interview in Miami on Tuesday that, with or without Musk sitting on the board of directors, Twitter is going to face "a lot of management distraction."
Wood said Twitter needs to work to balance its advertising model against the need to police content on the self-proclaimed "global town square.”
Tesla was the top company in Ark Investment Management's portfolio as of Dec. 31. The electric vehicle maker represented 7.9% of Cathie Wood's firm portfolio.
ARKK Investment Nears 2-Year Low
Ark Innovation ETF, Wood's flagship fund, is approaching a two-year low and was down another 4.6% at last check Tuesday morning.
Over the past 12 months the ETF is down nearly 60%.
But short sellers may be signaling that the decline is nearly over, according to an S3 Partners report showing that they are decreasing their positions.
Over the last 30 days as ARKK has fallen, short interest in the fund has decreased in market value by $205 million, according to the report.
“If their conviction was still as strong as earlier, they would have kept their short exposure flat or increased it,” said Ihor Dusaniwsky, head of predictive analytics at S3. “By letting it decrease, they are allowing the market to lessen the total value of their short bets.”
Short activity across Ark's ETF group has decreased on net this year by $692 million, according to S3, after rising to $2.8 billion in 2021.
