Flipping Bitcoin ETF For Tesla Stocks: Ark Invest Shuffles Portfolio

Ark Invest has recently changed its investment approach and traded a large portion of its ARKB, the Ark 21Shares Bitcoin ETF, to purchase shares in Tesla Inc. This step coincides with the volatility of the cryptocurrency and stock markets, proving the company’s reactive investment strategy.

Ark Invest Investment Strategy

Cathie Wood’s Ark Invest sold 118,209 shares of ARKB worth about $7.76 million on July 24. This sale happened when Bitcoin prices were fluctuating and dropped from $68,000 to $64,000. At the time of writing, Bitcoin was showing a moderate recovery with a  0.40% price increase in the last 24 hours.

The firm then shifted the funds to the acquisition of 33,143 Tesla shares worth around $7.16 million. Ark Invest bought the dip after Tesla’s stock price dropped by 12% after its Q2 report.

Market Response and Tesla’s Financial Performance

Tesla disclosed its Q2 financial results which painted a rather blended picture of the company. Although the company generated revenues of $25.05 billion against a forecast of $24.54 billion, the earnings per share were $0.52 against an expected $0.61. This resulted in a plunge of Tesla’s stock and Ark Invest seized this as a chance to invest in the company.

The US stock markets similarly, posted their biggest drop since 2022 on Wednesday as tech shares were sold off. The Nasdaq index was down 3.6%, The S&P 500 was down 2.3% and the Dow Jones Industrial Average was down by 1.2%. This is attributed to increased worries from investors about the sustainability of Big Tech companies and weak performance by major players such as Tesla.

Continued Portfolio Diversification

Besides the trades on Tesla and the Bitcoin ETF, Ark Invest also made changes to other sectors as well. The firm remained focused on the energy, healthcare, and biological sectors with the acquisition of shares in firms such as 10x Genomics, Oklo, and Teladoc Health Inc.

These purchases are consistence with Ark Invest’s approach of investing in several sectors to minimize exposure.

Ark Invest Reduction of ARKB Holdings

For the first time since its inception in January, Ark Invest sold shares of its ARKB spot Bitcoin ETF from its Next Generation Internet ETF (ARKW). The sales were part of the firm’s ongoing efforts to balance fund weightings, ensuring that no single holding exceeds 10% of the portfolio. 

ARKB remains the largest stake in the ARKW ETF of Ark Invest with a 10.98% allocation as of July 24. This position makes it occupy a better position than other holdings like Tesla, Roku, and Coinbase which have allocations of 9.5%, 8.48%, and 8.23% respectively.

These actions depict the company’s strategies of capturing market opportunities while at the same time adopting balanced investment strategies.

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