Cathie Wood bought more than 3 million shares of the self-driving truck company TuSimple on its IPO yesterday – and the stock is struggling

TuSimple_Truck_1
A TuSimple Truck.

Cathie Wood bought more than 3 million shares of the self-driving truck company TuSimple Holdings on its public debut Thursday.

The San Diego, California-based firm saw its stock struggle in its first day on the open market, trading down as much as 19% before recovering to break even at $40 for the day. Shares debuted on the Nasdaq under the ticker “TSP,” and traded down as much as 9% on Friday before mounting a recovery.

Wood’s flagship fund, the ARK Innovation ETF, picked up 2,350,496 million shares of the self-driving truck maker during the volatile day of trading.

The ARK Autonomous Technology & Robotics ETF also added some 728,536 shares of TuSimple.

The combined holdings of both ETFs were worth over $123 million as of Thursday’s closing price.

TuSimple raised $1.35 billion in its IPO this week, selling almost 34 million shares for $40 each. At that price, the firm is valued at nearly $8.5 billion.

TuSimple is the perfect thematic addition to Cathie Wood’s active exchange-traded funds due to its focus on autonomous driving, but the company is yet another unprofitable holding for Ark Invest.

Last year, TuSimple posted a net loss of $178 million on revenue of just $1.8 million, according to the firm’s S-1 prospectus.

TuSimple was founded by Dr. Xiaodi Hou, a renowned expert in computer vision software from the California Institute of Technology, in 2015.

The company raised over $648 million in seed funding before going public from big-name investors like Volkwagen Group, Goodyear Ventures, and Navistar, per Crunchbase.

The firm also counts UPS and the US Postal Service as backers.

The release of TuSimple’s self-driving trucks isn’t expected until 2024, however, meaning losses at the firm will likely continue in the neat term.

TuSimple uses lidar technology supplied by Aeva Technologies, which went public on March 15. The company hopes to improve efficiency and safety in trucking while lowering costs and reducing the carbon footprint of the industry.

It has created an “Autonomous Freight Network (AFN)” that stretches from Phoenix to Houston with the goal of “allowing freight to be moved from point to point safely and reliably using autonomous trucks.”

Shares of the autonomous trucking company fell 3.9% to $38.44 on Friday as of 10:54 a.m. ET.

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Coinbase climbs 6% after Cathie Wood’s ARK funds show $246 million investment in the crypto exchange

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Brian Armstrong, founder and CEO of Coinbase; Cathie Wood, founder and CEO of ARK Invest.

  • Shares of Coinbase rose as much as 6% on Thursday, following its turbulent trading debut.
  • Three of famed investor Cathie Wood’s funds snapped up close to $250 million worth of shares.
  • At Coinbase’s closing price on Wednesday of $328.28 per share, ARK holdings are worth about $246 million.
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Shares of Coinbase climbed as much as 6% on Thursday following its debut on the Nasdaq on Wednesday, after various funds managed by Cathie Wood’s ARK Invest snapped up around $250 million worth of shares.

The stock pared gains in early trading, rising 1.1% to $331.75 at 10:35 a.m. in New York.

The Ark Innovation ETF, Ark Fintech Innovation ETF, and Ark Next Generation ETF together bought a total of 749,205 shares of the cryptocurrency exchange during its much-anticipated debut, according to daily fund trading summary data on the fund’s website.

While Tesla remains the top holdings of two of its funds – ARKW and ARKK – the star stock picker sold around $170 million shares of the electric car company, which is also known for its bitcoin exposure. Tesla in February invested $1.5 billion in the popular cryptocurrency.

Coinbase, the largest cryptocurrency exchange in the US, opened at $381, spiked to $429, then tumbled below its debut price, even dipping as low as $310.

Still, at Wednesday’s close, it was worth more than major companies such as GM, FedEx, and Twitter

The listing of Coinbase was celebrated by many cryptocurrency bulls who view the move as a milestone for the digital currency ecosystem that has long faced scrutiny and skepticism.

“Coinbase’s direct listing on Nasdaq is a major step forward in bringing legitimacy and mainstream awareness to the digital asset sector as a whole,” Brad Kam, co-founder of Unstoppable Domains, told Insider.

“For the next billion cryptocurrency users, it will be critical that we focus on ease of use. Millions in funds have been lost due to typos in hard-to-read wallet addresses or simply sending the wrong coin to the wrong wallet,” he said.

Read more: Bitcoin is a headache to store, and that’s created an investment opportunity that could theoretically pay determined traders big risk-free returns by December

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Elon Musk asked Cathie Wood about the Buffett indicator flashing red. The Ark Invest chief explained why she isn’t worried.

Elon Musk SpaceX Tesla CEO holds hand to face thinking
Elon Musk.

  • Elon Musk asked Cathie Wood about the Buffett indicator’s record readings.
  • The Ark Invest CEO criticized GDP as a measure and trumpeted innovation.
  • Buffett’s favorite market gauge surged before the dot-com crash.
  • See more stories on Insider’s business page.

Elon Musk asked Cathie Wood this week what she thought about Warren Buffett’s favorite market indicator flashing red recently. The star stock-picker replied that the gauge is likely inaccurate, and argued the heady valuations of certain technology stocks are justified.

“What do you think of the unusually high ratio of S&P market cap to GDP?” the Tesla chief asked the Ark Invest boss. He was referring to a version of the Buffett indicator, which takes the combined market capitalization of a country’s publicly traded stocks and divides it by the latest quarterly GDP figure available.

The S&P 500 represents about 78% of the total market cap of US stocks, as measured by the Wilshire 5000 Total Market Index. The S&P 500’s combined market cap has surged past $33 trillion this year – more than 150% of the latest estimate for fourth-quarter US GDP of $21.5 trillion.

Wood replied to Musk’s question by suggesting that GDP understates economic growth because it doesn’t fully account for increased productivity. Technological innovations today are “dwarfing” those in previous eras, driving down prices and fueling demand, she continued.

The Ark founder also drew a line between the dot-com bubble and the current hype around tech stocks.

“Back then, investors chased the dream before the tech was ready and while costs were too high,” she said. “After gestating for 20-30 years, the dream has turned into reality.”

Moreover, Wood predicted that companies that have failed to innovate and instead have borrowed money to fund stock buybacks and dividends “will pay a steep price.” She expects them to be forced to cut prices to shift inventory and make debt repayments.

In short, Wood’s view is that the disconnect between the S&P 500’s market capitalization and national GDP isn’t worrying because GDP is a flawed measure, unprecedented innovation justifies higher company valuations, and technological advances are cutting costs so inflation won’t be a problem either.

Her stance clashes with Buffett’s praise of his namesake gauge as “probably the best single measure of where valuations stand at any given moment” in a Fortune article in 2001. When the indicator peaked during the dot-com boom, it should have been a “very strong warning signal” of an upcoming crash, the Berkshire Hathaway CEO wrote.

Musk might have to wait a few more months to find out which investor is right.

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ARK Invest is ill-prepared for downturn on analyst inexperience, lax risk controls, bloated asset base, strategist says

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  • ARK Invest is ill-prepared for a market downturn, according to Robby Greengold, CFA.
  • Wood’s ARK Innovation ETF is backed by research from inexperienced analysts with “lax risk controls.”
  • The ETF’s size and concentrated holdings could make it difficult for Wood to sell in a downturn.
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Strategist Robby Greengold, CFA broke down why Cathie Wood’s ARK Invest could be in for some serious trouble during a market downturn in a Morningstar article on Wednesday.

The analyst illustrated key potential weaknesses in Wood’s flagship exchange-traded fund, the ARK Innovation ETF, including inexperienced analysts, lax risk controls, and an illiquid, bloated asset base.

“Thematic-investing specialist ARK Investment Management has been in tune with the market’s unfolding narrative in recent years, but its lone portfolio manager, inexperienced team, and lax risk controls make it ill-prepared to grapple with a major plot twist,” Greengold wrote.

A one-woman show

It’s no secret Cathie Wood’s active exchange-traded-fund investing strategy has been immensely successful since ARK Innovation’s inception in 2014. Her fund has returned 495% to first-day investors since it began trading on October 31, 2014, and it’s up 183% in the past year alone.

Still, as Greengold pointed out in his article, Wood is the lone portfolio manager at her firm, and there isn’t a deep bench to replace her when she steps down. Greengold questioned whether having only one portfolio manager at ARK could lead to problems in the future, especially given the fund’s struggle to retain talent.

Additionally, Greengold notes that during Wood’s 2001 to 2013 tenure at AllianceBernstein, she “ran several strategies similar to this one that had high volatility, poor downside performance, and underwhelming long-term results.”

ARK Invest did not immediately respond to a request for comment.

Inexperienced analysts

Greengold was especially critical about the fund’s inexperienced analysts.

Very few ARK analysts have experience beyond an undergraduate degree and only about half of the current team signed on with any work experience, Greengold said. He noted this contrasts with the norm for equity analysts who typically have an undergraduate degree, some internship or entry-level work experience, and at least some progress towards investment credentials like a CFA.

While Wood sees this as a benefit that allows her analysts to have unique perspectives, Greengold questioned their lack of experience. Although he did note Wood’s team is more diverse than much of the competition, and prior research has shown that this leads to more creativity, innovation, and even profits.

Inexperience leads ARK to outsource much of its more technical analysis to what the fund calls “theme developers.” The firm says these include academics, entrepreneurs, and former ARK analysts. According to Greengold, ARK’s “analytical edge remains unclear” given its strategy of hiring such outsiders for technical analysis,

Analysts at ARK also operate differently. Unlike other firms who break up their analysts by sector, ARK analysts are given one or more technological specialties, like DNA sequencing or robotics, and then asked to become experts in their field. Greengold argues this setup “could lead to ultra-specialization and potential blind spots that better-resourced firms wouldn’t miss.”

A lack of risk controls

Greengold also expressed concern about risk management at ARK Invest, citing how Cathie Wood doesn’t employ risk management personnel. The firm also has very few portfolio construction parameters that other firms use to stay within acceptable risk limits.

And on March 29, 2021, “the fund removed prospectus language limiting the size of its top positions and its ownership percentage of individual companies’ shares outstanding.”

Greengold worries this could lead to issues in a market downturn.

“Even a high-octane strategy like this one should be cognizant of the risks embedded in its portfolio and manage to a definable risk tolerance. It seems not to,” the strategist said.

“Without risk-management professionals to stress-test the portfolio’s risk exposures, estimate its potential losses during historical or hypothetical market environments, and gauge worst-case scenarios, the team is poorly positioned to prepare and react,” Greengold concluded.

A less than liquid portfolio

Finally, ARK Innovation’s portfolio has become less liquid and “more vulnerable to severe losses as its size has swelled,” according to Greengold.

Assets under management grew to over $23 billion in February. Additionally, the ETF has more positions in companies in which it holds at least a 10% stake than any other ETF.

Retaining stakes in small companies makes it difficult to sell without materially impacting their stock prices. This forces Wood’s ETF to exit and enter positions slowly over time, which, again, could be a problem in a downturn.

Wood overcomes the lack of liquidity in her portfolio by holding what she calls “cashlike” large-cap names. That way, in a downturn, Wood could sell those stocks and concentrate her holdings in top conviction plays.

The problem is, according to Greengold, that Wood followed a similar gameplan in 2008 at AllianceBernstein and her “large-growth-oriented separate account lost 45% before fees – substantially worse than the Russell 1000 Growth Index’s 38% decline.”

Wood’s ARK Innovation ETF is down 11% this month as a rotation away from highly valued tech names and into value plays continues to drag on results.

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Cathie Wood says she sees potential in disruptive Chinese tech firms, even though their shares have tumbled recently

A Hisense chip is on display during the Appliance & Electronics World Expo (AWE) 2021 at National Exhibition and Convention Center (Shanghai)
  • The CEO of Ark Invest said “disruptive innovation platforms” in China were now competing with those in the US.
  • Speaking at a webinar, she said she was impressed by China’s commitment to driving innovation.
  • Chinese tech stocks are down, having been sold off heavily this month in volatile trade.
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Cathie Wood, the CEO of Ark Invest, said she sees growth potential in “disruptive innovation platforms” in China and that they are competing with similar ventures in the US now. Chinese tech stocks have been trending downwards recently as they face legal and regulatory pressure.

Speaking at a webinar in collaboration with Li Yimei, chief executive of China Asset Management this month, she discussed China’s commitment to innovation and said the country’s platforms have made huge progress in area such as DNA sequencing, energy storage, artificial intelligence, blockchain and robotics, especially relating to productivity, “which is good for the entire economy,” IgnitesAsia quoted Wood as saying.

Wood, through her ARK Invest exchange-traded fund, was one of the top performing asset managers of 2020, thanks in large part to her bets on disruptive technology.

She said many Chinese platforms are now close competitors to those in the US, after having caught up in recent years. “Competition in technology is a really good thing, in terms of moving the technology forward faster than otherwise would have been the case,” she said.

She said she was impressed with the government’s collaboration with the private sector, as she believes this will further the development of microchips and artificial intelligence.

Wood also said it reflected the government’s commitment to electric vehicles “I’m very impressed that China allows Tesla into the country without a local manufacturer. It is so determined to have electric vehicles proliferate throughout China,” she said.

Chinese tech shares have tumbled recently. The Hang Seng Tech index, which contains a number of big Chinese tech names such as Alibaba, Tencent, and FoxConn, is one of the worst performers from among the major indices this year, with a loss of almost 3%, versus a 1.5% gain in the tech-heavy Nasdaq 100.

Performance has been highly volatile for months, as tech stocks are impacted by legal and regulatory changes. Recently, the sector fell after news of a potential government-backed company designed to oversee tech data. Tensions between the US and China and a “Cold Tech War” were also major risk factors, Wedbush analyst Dan Ives said on Monday.

Wood’s Ark Invest published a note this week saying “Chinese technology companies are caught in political crosscurrents”, referring to the developments that have been causing stocks to crash. Ark Invest believes they will only cause “short term turmoil” and said “policies might accelerate or hinder the pace of innovation for a time, but we believe self-preservation probably will bring policymakers back to both tables.”

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A Cathie Wood ETF bought about 800,000 shares in a Serena Williams-backed SPAC that just entered a $1.6 billion deal

Cathie Wood
Cathie Wood.


Cathie Wood’s ARK Autonomous Technology & Robotics exchange-traded fund recently bought shares in a special-purpose acquisition company that counts tennis champion Serena Williams as a board member.

The ARKQ ETF snapped up 800,494 shares in Jaws Spitfire Acquisition Corp, according to data available on ARK Invest’s website. The fund counts Tesla, JD.com, Baidu, and Alphabet among its top ten holdings.

Miami-based Jaws is led by chairman Barry Sternlicht and CEO Matthew Walters. The SPAC recently entered a merger deal with digital manufacturing firm Velo3D to take it public, valuing the combined company at $1.6 billion.

Wood and the red-hot SPAC market have been caught up in a bit of a rough patch. Blank-check companies have already raised $96 billion across 296 IPOs so far in 2021, according to SPACInsider.com. Blank-check stocks tumbled on Thursday after Reuters reported the Securities and Exchange Commission has begun an inquiry into Wall Street’s SPAC frenzy and seeking voluntary information on dealings.

But 93% of SPACs that went public this week are trading below their $10 IPO price, Dealogic data compiled by Reuters showed. That is 14 out of 15 SPACs trading below par value.

Wood is known for her innovative investments in disruptive stocks. But her flagship $22.9 billion Innovation ETF is currently sitting on a 8% year-to-date loss after a broader pullback in high-growth stocks across multiple sectors. Meanwhile, the ARKQ ETF that bought into Jaws is up 4.6% year-to-date.

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Cathie Wood’s Ark Innovation ETF added 1.2 million shares of Palantir as the stock slipped to its lowest price in nearly 4 months

cathie wood ceo ark invest profile 2x1

Cathie Wood’s flagship fund bought the dip in Palantir on Wednesday, ETF records show.

Wood’s Ark Innovation ETF added roughly 1.2 million shares of Palantir as the stock sank to $21.88, its lowest closing price since November 23.

As of Wednesday’s close, the exchange-traded fund holds 10.8 million shares of Palantir worth $251 million. The data surveillance company makes up 1.07% of the Ark Innovation ETF.

Shares of Palantir closed down nearly 6% on Wednesday and continued to slide in premarket trading Thursday but reversed course after the opening bell. Palantir jumped as high as 1.9% to $22.30 Thursday morning.

The data company has fallen 17% in the last month amid a lockup expiration that’s prompted profit-taking from company insiders.

In a CNBC interview in February, Wood explained that her Palantir trade is a long-term bet. She also praised CEO Alex Karp’s plan to forfeit short-term profits and invest aggressively in the future.

“It’s exactly how we invest. We want our companies to invest aggressively. We don’t want profits now,” the investing titan told CNBC.

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Tesla jumps 6% after Cathie Wood says the stock can hit $3,000 because of possible robotaxi service

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  • Tesla jumped as much as 6% on Monday after Cathie Wood released a new $3,000 price target for the EV manufacturer.
  • Much of the upside potential for Tesla is predicated on its ability to launch an autonomous robotaxi service, according to Ark.
  • In a bear and bull case scenario, Ark expects Tesla to trade in between $1,400 and $4,000 per share, respectively.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Shares of Tesla jumped as much as 6% on Monday after Ark Invest’s Cathie Wood assigned a new 2025 price target of $3,000 for the EV manufacturer, representing potential upside of 359% from Friday’s close.

That’s a sizable increase from Ark’s previous 2024 price target of $1,400, and would give Tesla a valuation of about $3 trillion. Investors are taking notice due to the accuracy of Wood’s previous eye-popping price predictions for Tesla stock.

The price target incorporates expectations that Tesla will launch an autonomous robotaxi service built upon its full self-driving tech platform, which could bring in as much as $327 billion in revenue, according to Ark.

“In preparation for its robotaxi service, Tesla could launch a human-driven ride-hail network first, delivering a highly profitable recurring revenue stream and limiting the downside of a failed autonomous service,” Ark explained.

In its bear case, Ark expects Tesla to trade to $1,500 per share as it sells 5 million cars per year. In its bull case, Ark expects Tesla to trade to $4,000 per share as it sells upwards of 10 million cars per year. In 2020, Tesla sold about 500,000 vehicles.

The valuation model utilized by Ark incorporates Tesla’s relatively new insurance business, but doesn’t include its energy storage and solar business, nor its $1.5 billion allocation to bitcoin.

Tesla remains the largest holding for Ark Invest across all of its ETF strategies, and this isn’t the first time the investment management firm had a sky-high price target for Tesla.

In 2018, Wood said Tesla would hit $4,000 when the stock was trading at a split-adjusted price of about $250. The stock went on to trade at a split-adjusted price of $4,500 in early 2021, two years ahead of schedule.

tsla stock chart.JPG
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Cathie Wood’s Ark Invest expects Tesla to soar to $3,000 per share by 2025 on robotaxi service

cathie wood ceo ark invest profile 2x1
  • Cathie Wood’s Ark Invest now expects Tesla to soar 359% to $3,000 per share by 2025.
  • Much of the upside for Tesla is predicated on its ability to launch an autonomous robotaxi service, according to Ark.
  • In a bear and bull case scenario, Ark expects Tesla to trade in between $1,400 and $4,000 per share, respectively.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Cathie Wood’s Ark Invest is out with a new eye-popping price target for Tesla, and investors are taking notice due to the accuracy of its previous price predictions on the electric vehicle manufacturer.

Ark now expects Tesla to hit $3,000 per share by 2025, representing a potential upside of 359% from Friday’s close and a market valuation of about $3 trillion. That’s a sizable increase from its previous 2024 price target of $1,400.

The price target incorporates expectations that Tesla will launch an autonomous robotaxi service built upon its full self-driving tech platform, which could bring in as much as $327 billion in revenue, according to Ark.

“In preparation for its robotaxi service, Tesla could launch a human-driven ride-hail network first, delivering a highly profitable recurring revenue stream and limiting the downside of a failed autonomous service,” Ark explained.

In its bear case, Ark expects Tesla to trade to $1,500 per share as it sells 5 million cars per year. In its bull case, Ark expects Tesla to trade to $4,000 per share as it sells upwards of 10 million cars per year. In 2020, Tesla sold about 500,000 vehicles.

The valuation model utilized by Ark incorporates Tesla’s relatively new insurance business, but doesn’t include its energy storage and solar business, nor its $1.5 billion allocation to bitcoin.

Tesla remains the largest holding for Ark Invest across all of its ETF strategies, and this isn’t the first time the investment management firm had a sky-high price target for Tesla.

In 2018, Wood said Tesla would hit $4,000 when the stock was trading at a split-adjusted price of about $250. The stock went on to trade at a split-adjusted price of $4,500 in early 2021, two years ahead of schedule.

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Cathie Wood’s ARK ETFs load up on Teladoc after the stock dips following Amazon threat

Cathie Wood
Cathie Wood is the founder, CEO, and CIO of ARK Investment Management.

Three of Cathie Wood’s ARK Invest ETFs loaded up on 305,457 shares of Teladoc on Wednesday following a sharp fall in the share price.

Specifically, the ARK Innovation ETF added 174,957 shares, while ARK Genomic Revolution ETF and the ARK Next Generation Internet ETF added 78,371 and 52,148 shares, respectively.

Teladoc is now the largest holding in the ARK Genomic Revolution ETF and is tied for the third-largest holding in the ARK Innovation ETF with Roku.

As of market close on March 17, the combined shares bought by Wood’s ETFs were worth approximately $58 million.

Teladoc has been under pressure of late after Amazon announced it’s launching a rival telehealth business called Amazon Care. The service had previously only been available to Amazon employees in the state of Washington.

Now, as Insider reported back in December, Amazon Care is undertaking a national expansion with the goal of serving workers at other major companies in all 50 states.

Teladoc stock fell nearly 8% in a gap down move before Wednesday’s opening after the Amazon Care expansion was confirmed, perhaps signaling to Wood and co. that time was right for a buy.

Shares of the multinational telemedicine and virtual healthcare company have fallen over 36% from mid-February highs. While some investors fear Teladoc may have more downside ahead of it, many experts argue Amazon won’t be able to take over from the Harrison, New York-based firm so easily.

David Larsen, CFA, a managing director at BTIG, told Bloomberg, “the threat is overstated because Teladoc and American Well have contracts with many of the large health plans. Amazon has been very successful in taking market share from your traditional retail storefronts in many areas. But health care is different.”

Teladoc traded down 3% as of 3:49 p.m. ET on Thursday.

Teladoc chart
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