Cathie Wood’s Ark Invest bought 546,579 Coinbase shares as the stock of the crypto exchange fell to historic lows.
Ark Invest, an investment house headed by Cathie Wood bought 546,579 shares Coinbase Wednesday for $2.9 million. According to the daily trade information newsletter, the company’s total purchase was $546,579.
The purchase was spread across three actively managed exchange-traded funds of the company: Ark Innovation, Next Generation Internet and Fintech Innovation.
Coinbase, America’s largest cryptocurrency exchange, published its Q1 earnings report on Tuesday. It reported a quarterly loss in revenue of $430M and missed on key metrics.
After the publication of the report, Coinbase stock plummeted from $73 to $62 on Tuesday in after-hours trading. The rout continued with a 26% drop to $53.72 at Wednesday’s closing bell.
Coinbase’s earnings report was also released amid the wider bloodbath in the crypto market. This was caused by the collapse Terra’s UST stabilitycoin.
Coinbase became public on the Nasdaq stock exchange in April 2021 through a direct listing. The company’s stock was initially sold at $381.
‘Fire sale prices’
On Wednesday, Coinbase CEO Brian Armstrong went on Twitter to quote Fred Wilson, a well-known venture capitalist, who stated that markets are “irrational in short term but not in the long term” and that they sometimes “offer fire sales prices to the greatest companies around the world.”
Armstrong stated that Coinbase stock, at $50, could be considered a bargain and Ark Invest took the hint.
Wood is a stock-picker who is frequently praised. said that the current state in disruptive technologies was compared to the collapse of dot-com’s industry in 2000. She stated that stocks were sold off after the tech/telecom bubble burst because the “dream” wouldn’t become a reality for at least 20-25 years.
Wood believes that the reality is that “genomic sequence, adaptive robotics and energy storage, as well as AI and blockchain technology, are all real possibilities, with their stocks seemingly in high value territory.”
It remains to be seen if Ark Invest’s wager on Coinbase stock will pay off.
A Reuters report shows that ARK Innovation ETF outperformed other U.S. equities by 2020, thanks to its strong portfolio of companies like Zoom Video Communications Inc, Teladoc Health, and Teladoc Health, which rallied during the pandemic.
As of April 2022, Woods ARK Innovation ETF had fallen 50% year-to-date, and fell nearly 8% on Wednesday. Next Generation Internet and Fintech Innovation have fallen 46% and 48% respectively over the past year.