Cathie Wood increased her purchases of Robinhood Markets Inc. stock after the online broker’s stock fell to a record low after earnings fell short of Wall Street expectations.
According to trading data compiled by source, Wood’s firm ARK Investment Management purchased nearly 2.44 million Robinhood shares on Friday, the most since the company’s stock market debut in July. The purchases came on a day when the company’s stock briefly fell below $10 before rebounding in line with the broader U.S. market.
Robinhood is still trading at 67 percent of its IPO price and ranks among the worst high-profile global stock market debuts during the pandemic, alongside China’s Didi Global Inc. and London’s THG Plc.
According to the asset manager’s daily trading updates, Wood’s flagship ARK Innovation ETF purchased 1.95 million shares of Robinhood on Friday, while the ARK Next Generation Internet ETF and ARK Fintech Innovation ETF each purchased more than 230,000 shares.
According to source data, Ark, which is already one of the company’s largest shareholders, has purchased shares almost every week since late October, when the stock fell below its IPO price of $38.
After gaining nearly 150 percent in 2020, Ark’s flagship fund has struggled. As vaccines became available and economies began to recover, investors began to shift away from speculative tech stocks and toward names that would benefit from a broader recovery, causing ARKK to fall by 24% last year.
The Federal Reserve of the United States’ pivot toward rate hikes is exacerbating the pain this year, with ARKK down another 27 percent so far in 2022. According to IHS Markit Ltd. data, short interest as a percentage of shares outstanding in the ETF reached a new high of 11% earlier this month.
Wood and her firm frequently state that their investment horizon is at least five years, and they recognize that the disruptive companies they seek are frequently volatile. Ark’s daily trading updates only show active management decisions and do not include creation or redemption activity caused by investor flows.