Cathie Wood’s Ark Invest just made some eye-catching trades that could have implications for AI and crypto investors.
Ark Invest CEO Cathie Wood has made a name for herself as a growth-focused investor and helped deliver huge returns for exchange-traded funds (ETF) managed by her company when the market was in a bullish phase. Thanks to the explosive performance posted by Wood’s company’s funds, some investors pay close attention to the CEO’s trading activity.
Ark Invest notably sold 38,338 shares of Palantir (PLTR 1.58%) stock on Nov. 3 — the same day the artificial intelligence (AI) leader published its third-quarter results. Wood sold out of Palantir stock ahead of its Q3 release and subsequent valuation dip. While Ark Invest has reduced its Palantir holdings, it’s been piling into Bullish (BLSH +5.31%) — another company backed by tech founder and investor Peter Thiel.
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Ark executed a well-timed Palantir trade and bet big on Bullish
While Ark seems to have trimmed its Palantir holdings at an opportune time, the tech company’s Q3 results actually came in ahead of expectations. The business posted non-GAAP (adjusted) earnings of $0.21 per share on revenue of $1.18 billion, exceeding the average Wall Street analyst targets for per-share earnings of $0.17 on sales of $1.09 billion. The company also issued strong guidance for the current quarter and raised its full-year forecasts.
Despite the beat-and-raise quarter, the stock has pulled back in subsequent trading as investors have reacted to rising concerns that AI stocks may be in a valuation bubble. Palantir has also seen an uptick in bearish stock in conjunction with news that “big short” investor Michael Burry has purchased put options on the stock — suggesting that he expects the company’s share price to decline.
Today’s Change
(-1.58%) $-3.01
Current Price
$187.73
Key Data Points
Market Cap
$453B
Day’s Range
$181.38 – $190.32
52wk Range
$51.61 – $207.52
Volume
2.6M
Avg Vol
63M
Gross Margin
81.33%
Dividend Yield
N/A
The same day Ark unloaded a significant number of Palantir shares, it made aggressive additions of Bullish stock across three of its funds. Wood’s company bought 164,214 shares of the cryptocurrency specialist’s stock for its ARK Innovation ETF, 49,056 shares for its Next Generation Internet ETF, and 25,076 shares for its Fintech Innovation ETF.
With the purchases, Ark now holds more than $12 million in Bullish stock across its funds. While Palantir remains a large holding across Ark’s funds, recent trading moves suggest that the investment company is upping its bets on the crypto market.
In the second quarter, sales for Bullish’s subscription, services, and other (SSO) segment increased 27.4% year over year to $32.9 million. Overall adjusted revenue actually declined roughly 6% year over year to $57 million.
On the other hand, guidance for SSO revenue between $43.5 million and $48 million for the third quarter suggests that Bullish’s overall growth engine is strengthening again. Investors will get a closer look at Bullish’s recent performance before the market opens on Nov. 19 — when the company is scheduled to publish its Q3 results and host a conference call.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool has a disclosure policy.
