July 22, 2024

Cathie Wood’s Ark Invest Sells $53 Million Worth of Coinbase Shares

Cathie Wood’s Ark Invest, a prominent investment management firm known for its focus on disruptive technologies, recently made headlines by selling a significant number of Coinbase shares. The move came as the cryptocurrency exchange’s stock prices reached a 52-week high, marking the second time within a week that Ark Invest offloaded Coinbase shares.

On July 11, Ark Invest sold 135,152 Coinbase shares valued at $12 million from the Ark Innovation ETF. Following this, on July 14, the firm sold an additional 478,356 shares when the stock price reached a yearly high of $114.43, resulting in a total sale worth $53 million. The Ark Next Generation Internet ETF sold 93,227 shares, the ARK Innovation ETF sold 263,247 shares, and the Ark Fintech Innovation ETF sold 121,882 shares.

Despite the recent sell-off, Ark Invest remains the second-largest owner of Coinbase shares, retaining a 6.30% stake in the company. This move indicates a strategic decision by Cathie Wood and her team to rebalance their portfolio and possibly take profits following the significant surge in Coinbase’s stock price.

While Ark Invest reduced its exposure to Coinbase, it simultaneously increased its holdings in other technology-related companies. Cathie Wood has been known for her bullish stance on disruptive technologies, and this recent activity reflects her continued confidence in the sector.

One notable increase in holdings was in Meta Platforms (formerly Facebook), where Ark Invest purchased 69,793 shares worth over $21 million through the ARK Innovation ETF. The move coincided with Meta’s announcement of the launch of Threads, a microblogging platform positioned as a rival to Elon Musk’s Twitter. Additionally, the Ark Fintech Innovation ETF purchased 111,843 shares of Robinhood worth $1.3 million. Ark Next Generation Internet ETF also increased its holdings with 12,559 Meta shares and 169,116 Robinhood shares. In total, Ark Invest invested $24 million in Meta shares and $3.3 million in Robinhood shares.

The decision to buy into Meta and Robinhood aligns with Cathie Wood’s investment philosophy of identifying disruptive companies with significant growth potential. Notably, Robinhood’s stock prices have seen a 24% increase over the past 30 days, making it an attractive investment opportunity for Ark Invest.

As for Coinbase, the stock price rallied following a recent court ruling in favor of Ripple in an ongoing lawsuit. The ruling by Judge Torres stated that selling XRP on exchanges does not inherently constitute an investment contract. This ruling provided Coinbase with renewed hope in its own legal battle against the U.S. Securities and Exchange Commission (SEC). The positive sentiment surrounding the outcome of the Ripple lawsuit led to a surge in the price of XRP, with a nearly 70% jump observed in the crypto market.

Coinbase, as the largest U.S.-based cryptocurrency exchange, experienced a noticeable increase in its stock prices following the court’s ruling. Since then, COIN has risen nearly 25%. As of the closing price on Friday, Coinbase shares were traded at $105, reflecting an overall increase of 213% since the beginning of the year.

Prior to the Ripple lawsuit ruling, Coinbase’s stock prices had been buoyed by its listing as a surveillance-sharing partner for several spot bitcoin ETF applicants in the United States. Notably, industry giants such as BlackRock and Fidelity were among the applicants, which further solidified Coinbase’s position in the cryptocurrency space.

In summary, Cathie Wood’s Ark Invest sold $53 million worth of Coinbase shares as the cryptocurrency exchange’s stock prices reached new highs. The firm’s strategic decision to rebalance its portfolio reflects a potential profit-taking move following the recent surge in Coinbase’s stock price. However, Ark Invest simultaneously increased its holdings in Meta Platforms and Robinhood, demonstrating its continued confidence in disruptive technologies. Furthermore, the recent court ruling favoring Ripple positively impacted Coinbase’s stock prices, contributing to its overall rally.