Coinbase’s strongly negative momentum on the stock market continues. Bloomberg revealed that Ark Invest funds controlled by Cathie Wood sold Coinbase shares for the first time this year.
Ark Invest demobilizes 1.4 million Coinbase shares from its portfolio
The decision was reportedly made after the revelation that the SEC was investigating the exchange on the grounds that it may have listed tokens believed to be unregistered securities.
In total, three Ark Investment Management funds yesterday sold just over 1.4 million Coinbase shares, with a total value of about $75 million.
Coinbase’s stock has been suffering badly on the stock market for more than eight months now, particularly due to the collapse of the crypto markets triggered since mid-November 2021. In total, it has lost as much as 85% since then, whereas the price of Bitcoin has lost “only” 69%.
The most significant collapse was in May, coinciding with the implosion of the Terra ecosystem, when Coinbase’s share price hit an all-time low at $41. Yesterday the closing price was just under $53, a loss of as much as 21% in a single day of trading.
Cathie Wood had been a major proponent of Coinbase’s stock market landing, so much so that in April last year they invested $246 million to buy nearly 750,000 shares. Later they also bought more, at prices far higher than they are today.
For example, when they made their first investment, the market price was well above $300 a share. Since then the loss has been more than 80%.
Thus yesterday’s sale was made at a big loss, and this reveals a big fear about the future of the exchange.
Investigations by the SEC do not help Coinbase’s stock
Although the company claims that it has not violated any US regulations, not many people seem to believe it. Ark had become the company’s third largest single shareholder at the end of June, with nearly 9 million shares, so a 15% unloading of its shareholding is certainly not a good sign.
Then again, Ark Investment Management has lost nearly half the value of its assets under management from December to the present, and its flagship ETF, Ark Innovation, has plunged nearly 50% over the course of 2022.