Three Ark Investment funds bought a total of 749,205 shares of the Coinbase stock during its Nasdaq debut yesterday.
Taking yesterday’s closing price of $328 per share as a reference, that would represent an investment of about $246 million.
The founder, CEO and CIO of ARK Investment Management, Cathie Wood, has been very bullish on bitcoin and cryptocurrencies for quite some time, so this large investment should not come as much of a surprise.
The shares were bought by Ark Fintech Innovation ETF, Ark Next Generation Internet ETF and most importantly Ark Innovation ETF, which is the largest actively managed ETF with $17 billion in assets under management and a 2020 return of 170%.
The trading of the Coinbase stock on the Nasdaq opened yesterday with a price of $381 per share, which quickly rose to $429 and then fell to $310, a hike of almost $120 in a single day.
They then closed at $328 a share, which is lower than the opening price, but in today’s pre-market the price has already climbed back up to $350.
Ark bullish on the Coinbase stock
Ark Investment’s investment could mean that Cathie Wood wants to offer clients of her funds the chance to take a position in this asset, and since these are managed ETFs, it suggests that Wood is bullish on Coinbase as well.
The company invests precisely in companies involved with disruptive trends, with a limited pool of targets on which to deploy capital.
At the same time, Ark Next Generation sold 57,043 shares of Tesla for about $40 million, while Ark Fintech Innovation sold 37,471 shares of Intercontinental Exchange, the company that runs the New York Stock Exchange, for about $4 million.
So after yesterday’s drop, with a high volatility probably due to the choice of proceeding with a direct listing instead of a classic IPO, someone seems to be willing to bet on the medium/long term on Coinbase, i.e. a company that last year generated a turnover of over $1.1 billion, more than doubling the previous year’s result, and that in the first quarter of 2021 alone came close to $2 billion.
During 2020 it also generated 300 million in profit, while in the first quarter of 2021 it has already exceeded 700 million.
Since it seems unlikely that this growth will come to a halt any time soon, Ark Investment’s investment does not seem particularly daring.