Cathie Wood, chief executive of Ark Investment Management, bought Coinbase Global (COIN) Monday for the first time in a week and repeated two trades from Friday.
All the valuations below are as of Monday’s close.
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Ark funds snagged 168,869 shares of Coinbase, the largest U.S. cryptocurrency exchange, valued at $8.5 million.
Coinbase started a foreign exchange for cryptocurrency derivatives Tuesday, as the company is butting heads with U.S. regulators.
Coinbase stock has tumbled 54% over the past 12 months amid turmoil in the cryptocurrency market. But it has rebounded 45% this year, helped by bitcoin’s recovery. Coinbase is the fifth biggest holding in Wood’s flagship Ark Innovation ETF (ARKK).
Also Monday, Ark Innovation sold 303,777 shares of online sports gambling platform DraftKings (DKNG), valued at $6.89 million.
DraftKings stock has skyrocketed 93% year to date and 47% in the past year amid strength in the sports-gambling market. It’s the eighth biggest holding in Ark Innovation.
Finally, Ark funds purchased 142,934 shares of Teladoc Health (TDOC), the phone/video healthcare provider, valued at $3.9 million.
The company reported an 11% revenue increase in the first quarter from a year earlier, and its net loss was little changed at 42 cents a share compared to 41.58 cents a year ago.
Teladoc shares have dropped 30% over the last 12 months, but are up 10% year to date. It’s the ninth largest holding in Ark Innovation, surpassing Shopify Monday.
Wood’s Lagging Returns
Meanwhile, Wood’s performance hasn’t exactly lit the investment world on fire over the past year, as her young technology stocks have slumped. Ark Innovation has descended 26% during that period and 78% from its February 2021 peak.
Nonetheless, the fund has bounced back 12% so far this year, as tech stocks have rebounded in general.
Mama Cathie, as Wood is known to her fans, defends her strategy by noting that she has a five-year investment horizon. But the five-year annualized return of $6.7 billion-asset Ark Innovation was negative 0.76% through May 1, compared with positive 11.38% for the S&P 500.
The fund’s performance also doesn’t come close to Wood’s goal for annualized returns of 15% over five-year periods.
Ark Innovation suffered a net investment ouflow of $172 million during the five days through May 1, but enjoyed a $154 million inflow over the last year, according to ETF research firm VettaFi.
What Draws Investors to Wood
You might wonder why so many investors have stuck with Wood. The fact that she had one spectacular year certainly helps. Ark Innovation skyrocketed 153% in 2020.
Also, Wood has become something of a rock star in the investment world, appearing frequently in the media. She explains financial concepts in ways that novice investors can understand.
Wood does have her detractors. Morningstar analyst Robby Greengold offered a harsh critique of Ark Innovation in March. “Its dubious ability to successfully navigate the challenging territory it explores earns a rating of negative,” he wrote.
Wood, of course, begs to differ. “I do know there are companies like that one [Morningstar] that do not understand what we're doing,” she said last year in an interview with Magnifi Media by Tifin.
