Cathie Wood’s space ETF sold off Virgin Galactic stock before it staged a massive rally following a successful test flight

Cathie Wood
Cathie Wood is the CEO and chief investment officer of ARK Invest, which runs three of the highest-returning stock ETFs of the last three years.

  • Cathie Wood’s Ark Invest sold most of its Virgin Galactic holdings as of May 25.
  • The gradual selling happened just before Virgin Galactic launched a successful test flight that pushed its stock to a six-week high.
  • As of May 25, only Wood’s ARKX had Virgin Galactic shares, holding only about $322 of the commercial-space flight company.
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Cathie Wood’s Ark Invest ETFs sold off most of their Virgin Galactic holdings just before the commercial spaceflight company launched a successful test flight that pushed its stock to a six-week high.

The space tourism company completed its third crewed flight to the edge of space on May 22 following a botched attempt in December. Virgin Galactic shares were up 56% in the run-up to the launch and rose further when markets opened on Monday.

But by this time, Wood’s investment management firm has sold most of its holdings.

Only the ARK Space Exploration & Innovation ETF, ARKX, held Virgin Galactic shares out of all the six actively managed ARK ETFs as of May 25.

As of Tuesday, ARKX holds just 12 shares of Virgin Galactic worth around $322. Data compiled by Bloomberg showed that the fund in March had more than 220,000 shares.

The Ark Autonomous Technology & Robotics ETF, or ARKQ, meanwhile, does not hold any shares of the company as of Tuesday. ARKQ, according to Bloomberg, held the bulk of Virgin Galactic shares among Wood’s ETFs.

In February, Ark held more than 1.7 million shares in a month when Virgin peaked to a record-high. Ark ETFs had boosted their holdings to more than 2 million by May, according to Bloomberg data.

Shares of the Mojave, California-based company were trading 7.55% lower to $24.86 as of 11:35 a.m. ET.

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Cathie Wood’s ARK Innovation ETF falls its lowest point in 2021 as inflation fears hammer tech stocks

Cathie Wood
Cathie Wood is the CEO and chief investment officer of ARK Invest, which runs three of the highest-returning stock ETFs of the last three years.

Cathie Wood’s flagship exchange-traded fund tumbled by more than 5% on Monday to its lowest point so far this year as inflation fears drove a big selloff in high-growth tech stocks.

The ARK Innovation ETF, an actively managed fund that invests in disruptive technology from electric vehicles to autonomous driving, has tumbled over 16% year-to-date.

Wood’s flagship fund, which started trading in 2014 and currently has more than $22 billion in assets under management, has fallen around 32% since its February 12 peak of around $153.

The fund’s top holdings were all in the red as of Monday afternoon. Leading the downturn is Tesla, which slipped 5.5%, and Teledoc Health, which fell 7.2%. Roku and Square were lower by 5% and 7% respectively.

Rising inflation fears are driving the selloff Monday, with investors are weighing whether rising costs will derail the record-setting rally in stocks.

“While we remain conscious of the potential for rising interest rates, inflation risks, and higher taxes, we are not overly concerned with any of these risks as market fundamentals remain solid amid a gradual normalization of economic activity and policy stimulus,” Andrea Bevis, senior vice president at UBS Private Wealth Management, said in a statement.

Wood, however, shrugged off concerns surrounding technology shares, telling CNBC on Friday that she loves the setup for her ETFs.

“The worst thing that could have happened to us is to have the market narrowly focus on just our ilk of stock – the innovation space,” the star stock picker told CNBC.

Still, all of Wood’s five ETFs combined have lost about $2 billion in May, according to FactSet as first reported by CNBC.

Wood had a banner year in 2020, earning her a cult-like following in the industry. Her funds delivered eye-popping returns with her ARKK up more than 150% in 2020 – a flip so far compared to this year.

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