Cathie Wooden Watch: Ark Buys DraftKings Amid massive Drop

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

The chief govt of Ark Funding Administration acquired 1,682,361 shares of on-line sports activities betting firm DraftKings  (DKNG)  by 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 stated its person development slowed within the third quarter.

Wooden has stated all through 2022 that the decline of the younger, “disruptive” expertise corporations that she favors has created shopping for alternatives. DraftKings has slid 59% 12 months up to now.

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% to date in 2022. Chip shares have suffered this 12 months 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% 12 months up to now.

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% to date this 12 months, however has climbed 11% within the final month. Wooden purchased $1.7 million price 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 12 months, 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 traders 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 just one.5% by Nov. 4, far behind the S&P 500’s 9.75% return.

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

Ark Innovation has tumbled 64% to date this 12 months, and it’s down 78% from its February 2021 peak.

The $6.9 billion fund’s underperformance could lastly be beginning to push traders away. Ark Innovation suffered a web outflow of $486 million within the three months by Nov.4, in keeping with VettaFi, an ETF analysis agency. However it has nonetheless registered an influx of $1.26 billion 12 months up to now.

Cathie Wooden Will get loads of Criticism

You would possibly surprise why so many traders have caught with Wooden, regardless of her mediocre returns. The truth that she had one spectacular 12 months definitely helps. Ark Innovation ETF skyrocketed 153% in 2020.

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

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

“ARKK reveals few indicators of enhancing its danger administration or capability 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 corporations like that one [Morningstar] that don’t perceive what we’re doing,” she stated.