Cathie Wood's Ark Invest Buys the SpaceX Dip, Adds $32.5M Shares After SPCX Stock Selloff

Cathie Wood's Ark Invest is buying more SpaceX shares even after the stock saw a massive drop in value days after its impressive market debut.

Ark Invest’s latest trading disclosure showed that the firm bought 210,121 shares of SPCX on Monday across four of its exchange-traded funds. The new purchase was worth about $32.5 million based on SpaceX’s closing price of $154.60.

The move shows that Ark Invest is still confident in the stock despite the pullback. The firm was already holding significant exposure to the company’s shares before its public listing through its ARK Venture Fund.

Ark Invest doubles down on SpaceX

The new purchase comes just less than two weeks after Ark Invest made a much larger bet on the Elon Musk company during its first days as a public company.

Notably, on June 12, Cathie Wood's firm bought about 3.29 million shares worth about $444.3 million. With this new purchase, SpaceX is gradually becoming one of Ark Invest’s biggest holdings. 

The stock now represents about 4.46% of the firm's ARKK ETF, equal to about $313.7 million in assets. It is also the largest holding in ARKX and one of the top positions in other funds of the firm.

Notably, Cathie Wood herself has always shared her confidence in SpaceX. Earlier this month, she said the company has a “10-year lead” over others in the space industry. 

Ark Invest’s valuation models also project that the company could hit an enterprise value of $2.5 trillion by 2030. Its more bullish scenario puts the figure at $3.1 trillion.

Shares fall after record IPO run

SpaceX stock fell 16.5% on Monday alone, closing at $154.60. This pushed the stock to its lowest level since it began trading, marking a 23% drop from its peak. The shares is also down by 3% in premarket trading on Tuesday morning.

The three-day sell-off removed about $600 billion in its market value. Data also suggests that almost $400 billion was entirely wiped out during Monday’s trading session alone.

Source: Financial Times

The company went public on June 12 after raising $75 billion at a valuation of $1.75 trillion. This made it the largest IPO in history. A few days later, the stock surged to an all-time high of $225.64, pushing its market value above $2.7 trillion.

The selloff also impacted Elon Musk’s fortune. According to Forbes,  his net worth fell by $150 billion in a single day. However, Musk still maintains his trillionaire status. 

Meanwhile, Peter Schiff shared his playful thoughts on the crash. He stated that Elon Musk’s paper loss is equivalent to Warren Buffett's entire net worth, so he doesn’t feel sorry for him.

Despite this, Ark Invest has taken the decline as a buying opportunity. The firm's purchase is similar to previous moves of buying shares of companies when they fall. Last week, Ark bought about $18.4 million worth of Coinbase shares after a month-long decline.