Ark Invest Favors Coinbase & Robinhood Over Tesla in Crypto Move

In the past week, Ark Invest has reduced its position in Tesla. Simultaneously, the firm has moved to snap up crypto stocks with large investments in Coinbase and Robinhood.

The technology-focused investment management company holds a number of major crypto stocks through its Exchange-Traded Funds (ETFs). Following a devaluation of crypto exchanges like Coinbase earlier this month, their share price has rebounded in the past week.

Ark Invest Dumps Tesla, Among Others, as Tech Stock Rally Dissipates

Through the Ark Innovation ETF and the Ark Next Generation Internet ETF, Ark’s private equity funds offloaded nearly $16 million USD worth of Tesla stock in the past week. 

Of course, the firm is still heavily invested in Tesla. But Ark’s move to partially divest from the electric vehicle manufacturer reflects cooling sentiment toward the tech stock. After climbing around 140% in the year to date, several institutional investors have signaled a more bearish near-term outlook for Tesla stock.

In a note to investors on Wednesday, Barclays analyst Dan Levy downgraded Tesla shares to equal weight from overweight.

“We believe the stock’s recent rally can be best explained by the market’s current AI-driven thematic trade […] yet while we aren’t surprised that the stock has participated in the rally, we believe it is prudent to move to the sidelines,” the note stated.

Likewise, on Thursday, Morgan Stanley analyst Adam Jonas also downgraded Tesla to equal weight.

Besides Tesla, Ark has sold off a range of other blue-chip tech stocks this week. For example, on Friday, it offloaded 78,676 shares in Shopify worth over $5 million USD. The investment management firm also reduced its exposure to the online sports betting company DraftKings.

Ark Continues to Back Crypto as Coinbase Price Rebounds

Just as it was partially exiting its positions in major tech companies, Ark Invest has doubled down on its investments in the crypto sector. 

The firm holds significant stakes in several American crypto firms. And via a major investment in the Grayscale Bitcoin Trust, Ark’s ARKW fund is also well-exposed to BTC.

Foremost among Ark’s crypto holdings are Jack Dorsey’s Block Inc investments and the crypto exchange Coinbase. The firm is the fourth-largest shareholder in the latter. 

Earlier this month, Coinbase’s share price was battered by news that the US Securities and Exchange Commission (SEC) has brought a lawsuit against it. 

As Coinbase’s stock price plummeted by as much as 21% in a single day, Ark Invest snapped up an additional 419,324 shares in the company.

The exchange operator’s share price rebounded after falling to as low as $50.02 USD on June 6. On Friday, the stock closed at $61.47 USD, having made notable gains in the previous ten days.

Robinhood Investment Suggests Confidence in FinTech Growth

As well as buying Coinbase stock during the dip, Ark Invest ETFs purchased over a million Robinhood shares valued at $15,39 million USD this week. In light of a simultaneous selloff of Tesla stock, the move suggests more bullish sentiment with regard to FinTech investments compared to the wider tech sector.

Like Coinbase, the SEC’s enforcement actions affected Robinhood’s share price. But its stock market performance is less tied to the fate of crypto markets than Coinbase’s.

On Thursday, Robinhood announced that it would acquire the credit card platform X1 to expand beyond its core business of stock and crypto trading. The X1 deal, valued at $95 million USD, will allow Robinhood to offer its customers access to credit.