Cathie Wood’s ARK Invest, known for its bullish stance on cryptocurrency and disruptive innovation, has offloaded another significant portion of its Robinhood (HOOD) holdings. On October 8, ARK sold 1.4 million Robinhood shares, valued at $36.4 million, across three of its funds. The sale, as seen in a trade notification reported by Cointelegraph, follows a pattern driven by regulatory compliance and the meteoric rise of Robinhood’s stock price this year.
ARK’s Compliance With Regulatory Limits
This sale aligns with ARK’s ongoing strategy to balance its Robinhood exposure due to Rule 12d3-1, which limits a fund from holding more than 5% of its total assets in the securities of one issuer. ARK has previously sold portions of its Robinhood shares for the same reason.
Robinhood stock has been a top performer for ARK in 2024, surging over 100% year-to-date (YTD). This latest sale occurred as Robinhood reached its highest stock value since November 2021, closing at $25.61 on October 8. Despite the recent gains, Robinhood’s stock still lags behind its all-time high of $44, which it achieved shortly after its July 2021 IPO.
Robinhood’s Impressive Stock Performance
Robinhood’s stock surge has made it one of the market’s standout performers in 2024, gaining nearly 30% over the past 30 days alone. This resurgence comes amid increasing interest in trading platforms as retail investors and cryptocurrency traders flock to platforms like Robinhood and Coinbase.
ARK Invest’s decision to sell a portion of its Robinhood holdings amid this price rally highlights its adherence to long-term portfolio management strategies. Wood’s team remains optimistic about the disruptive potential of fintech, even as it trims its holdings to maintain compliance with portfolio regulations.
While ARK has reduced its stake in Robinhood, it continues to hold significant investments in the company. As of October 9, ARK’s Innovation ETF (ARKK) still held $274 million in Robinhood shares, representing 4.9% of the fund’s total assets. ARK’s three funds involved in the sale—ARKK, ARK Next Generation Internet ETF (ARKW), and ARK Fintech Innovation ETF (ARKF)—reflect its strategy of investing in companies leading the financial and technological revolution.
Notably, ARK holds an even larger position in Coinbase, the U.S.-based cryptocurrency exchange. With $368 million in Coinbase shares, accounting for 6.6% of ARKK’s total portfolio, Coinbase ranks as ARK’s third-largest holding behind Tesla and Roku. This signals Wood’s continued confidence in the long-term growth potential of crypto exchanges, even amid regulatory uncertainties.
The Road Ahead for ARK and Robinhood
As Robinhood’s stock continues its upward trajectory, ARK’s decision to reduce its stake is a strategic move in managing its overall risk and maintaining portfolio diversification. With the stock far from its peak, the continued surge could reignite interest in Robinhood’s growth potential.
For now, ARK Invest’s positioning in both Robinhood and Coinbase showcases its commitment to staying at the forefront of the fintech and crypto revolution. Investors are watching closely to see how these holdings evolve in ARK’s disruptive innovation portfolio as markets continue to fluctuate in 2024.
In the evolving world of fintech and cryptocurrency, Cathie Wood’s ARK remains a bellwether, navigating the balance between regulatory constraints and seizing market opportunities.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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