Cathie Wood noticed a shopping for alternative in Twitter Inc.’s worst week since October.
Her agency, Ark Investment Management, scooped up about 1.Three million shares of the social media community price $71 million on Friday because the inventory plunged 15%, in response to an electronic mail on the agency’s buying and selling exercise. That slide got here after after Twitter reported disappointing first-quarter gross sales, in distinction to the stronger-than-expected outcomes from different massive tech firms, together with Facebook Inc. and Alphabet Inc.
Ark’s actively managed exchange-traded funds have suffered as traders have shifted out of development shares because the nation rebounds, which is able to profit firms whose companies are extra intently tied to swings within the financial system. Her $23 billion flagship ARK Innovation ETF (ARKK) and ARK Subsequent Era Web ETF (ARKW) — the 2 funds that purchased Twitter shares — are down 3.5% and up simply 1.5% this yr, respectively, after posting triple-digit returns in 2020.
However Wooden is understood for doubling down on her methods throughout selloffs, particularly when automaker Tesla Inc. plunges. She’s repeatedly mentioned that regardless of the broader rotation out of high-growth firms and into worth shares, her crew maintains their conviction in modern applied sciences and has a five-year time horizon.
“Twitter suits properly with Ark and Cathie Wooden’s” funding model, mentioned Ross Mayfield, funding technique analyst at Robert W. Baird & Co. “It’s on model to the extent that it’s within the tech area and it’s a brand new Web oriented firm. However it’s completely different from among the moonshot firms they actually like. Twitter is a tech firm, but it surely’s type of simply your commonplace social media.”
The social media large’s inventory plunged late final week after firm executives mentioned gross sales had been sluggish within the first months of the yr. Though its income gained 28%, it lagged among the different digital promoting behemoths like Fb Inc. and Alphabet Inc.’s Google.
Wooden’s ARKK fell 1.8% as of 11:07 a.m. in New York. The fund simply notched first month of outflows since September 2019, dropping about $76 million, in response to information compiled by Bloomberg.