Cathie Wood noticed a shopping for alternative in Twitter Inc.’s worst week since October.
Her agency, Ark Investment Management, scooped up about 1.3 million shares of the social media community value $71 million on Friday because the inventory plunged 15%, in response to an electronic mail on the agency’s buying and selling exercise. That slide got here after after Twitter reported disappointing first-quarter gross sales, in distinction to the stronger-than-expected outcomes from different huge tech corporations, together with Facebook Inc. and Alphabet Inc.
Ark’s actively managed exchange-traded funds have suffered as buyers have shifted out of progress shares because the nation rebounds, which can profit corporations whose companies are extra intently tied to swings within the economic system. Her $23 billion flagship ARK Innovation ETF (ARKK) and ARK Next Generation Internet ETF (ARKW) — the 2 funds that purchased Twitter shares — are down 3.5% and up simply 1.5% this yr, respectively, after posting triple-digit returns in 2020.
But Wood is thought for doubling down on her methods throughout selloffs, particularly when automaker Tesla Inc. plunges. She’s repeatedly mentioned that regardless of the broader rotation out of high-growth corporations and into worth shares, her crew maintains their conviction in modern applied sciences and has a five-year time horizon.
“Twitter fits well with Ark and Cathie Wood’s” funding fashion, mentioned Ross Mayfield, funding technique analyst at Robert W. Baird & Co. “It’s on brand to the extent that it’s in the tech space and it’s a new Internet oriented company. But it is different from some of the moonshot companies they really like. Twitter is a tech company, but it’s kind of just your standard social media.”
The social media large’s inventory plunged late final week after firm executives mentioned gross sales have been sluggish within the first months of the yr. Although its income gained 28%, it lagged among the different digital promoting behemoths like Facebook Inc. and Alphabet Inc.’s Google.
Wood’s ARKK fell 1.8% as of 11:07 a.m. in New York. The fund simply notched first month of outflows since September 2019, shedding about $76 million, in response to information compiled by Bloomberg.