Cathie Wooden Watch: Ark Buys DraftKings Amid massive Drop

Famed investor Cathie Wooden purchased shares of two main firms and bought shares of two others Nov. 4, persevering with her double-sided buying and selling sample.

The chief government of Ark Funding Administration acquired 1,682,361 shares of on-line sports activities betting firm DraftKings  (DKNG)  via a number of Ark funds. That kitty was valued at $19 million as of Friday’s shut.

DraftKings sank 28% Friday, the most important drop because it started buying and selling in 2019, after the corporate mentioned its consumer progress slowed within the third quarter.

Wooden has mentioned all through 2022 that the decline of the younger, “disruptive” expertise firms that she favors has created shopping for alternatives. DraftKings has slid 59% yr thus far.

However Wooden apparently doesn’t see Nvidia’s  (NVDA)  descent as a shopping for alternative. Ark Innovation ETF  (ARKK)  dumped 167,914 shares of the large semiconductor maker Friday. The shares had been valued at $23.8 million as of Friday’s shut.

Nvidia has tumbled 52% up to now in 2022. Chip shares have suffered this yr amid supply-chain bottlenecks and slumping demand.

Ark funds snagged 161,565 shares of video streaming firm Roku  (ROKU) , valued at $8 million as of Friday’s shut. It has plummeted 78% yr thus far.

Ark Fintech Innovation ETF  (ARKF)  bought 277,519 shares of on-line securities brokerage Robinhood Markets  (HOOD) , valued at $3.4 million as of Friday’s shut.

It has misplaced 30% up to now this yr, however has climbed 11% within the final month. Wooden purchased $1.7 million value of Robinhood Nov. 1. So it’s troublesome to make out what she thinks of this inventory.

Wooden’s Underperformance

Ark’s ETFs have tumbled this yr, as their expertise inventory holdings suffered from weak earnings. Wooden has defended herself by noting that she has a five-year funding horizon.

And the five-year observe document of her flagship Ark Innovation ETF may certainly give buyers consolation as much as Could 9. The fund’s five-year return beat that of the S&P 500 till then. However the five-year annualized return of Ark Innovation totaled only one.5% via Nov. 4, far behind the S&P 500’s 9.75% return.

The fund’s efficiency additionally falls nicely under Wooden’s objective for annualized returns of 15% over five-year intervals.

Ark Innovation has tumbled 64% up to now this yr, and it’s down 78% from its February 2021 peak.

The $6.9 billion fund’s underperformance could lastly be beginning to push buyers away. Ark Innovation suffered a web outflow of $486 million within the three months via Nov.4, in keeping with VettaFi, an ETF analysis agency. But it surely has nonetheless registered an influx of $1.26 billion yr thus far.

Cathie Wooden Will get plenty of Criticism

You may surprise why so many buyers have caught with Wooden, regardless of her mediocre returns. The truth that she had one spectacular yr definitely helps. Ark Innovation ETF skyrocketed 153% in 2020.

Additionally, Wooden has turn into one thing of a rock star within the funding world, showing ceaselessly within the media. She is clearly clever and articulate, explaining monetary ideas in ways in which novice buyers can perceive.

Nonetheless, Wooden has her detractors. On March 29, Morningstar analyst Robby Greengold issued a scathing critique of Ark Innovation.

“ARKK exhibits few indicators of bettering its danger administration or capacity to efficiently navigate the difficult territory it explores,” he wrote.

Wooden countered Greengold’s factors in an interview with Magnifi Media by Tifin. “I do know there are firms like that one [Morningstar] that don’t perceive what we’re doing,” she mentioned.