Ark Invest, led by Cathie Wood, made significant trades on Wednesday, involving Space Exploration Technologies Corp (NASDAQ:SPCX) and Robinhood Markets Inc (NASDAQ:HOOD).
The SpaceX Trade
On July 22, Ark Invest made a notable move by purchasing shares of SpaceX across multiple ETFs, including ARK Innovation ETF (BATS:ARKK), ARK Autonomous Technology & Robotics ETF (BATS:ARKQ), ARK Next Generation Internet ETF (BATS:ARKW) and ARK Space & Defense Innovation ETF (BATS:ARKX). This purchase involved a total of 121,384 shares, with the stock closing at $115.26. The total value of this investment amounts to approximately $14 million.
A 25-year First Trust study found that most U.S. IPOs underperform over time, with 59% posting negative returns within two years and the median stock falling 10.5%. For SpaceX, the research underscores the challenge of translating strong market enthusiasm into long-term financial performance. Although the company has growth drivers including Starlink and launch services, investors will be watching whether it can justify its premium valuation through consistent execution.
Meanwhile, CEO Elon Musk warned that investors maintaining significant short positions in the stock face a “very low” probability of success over time. The comments, amplified by media coverage, came as short interest has increased following the stock’s decline from its IPO highs.
