2024-03-23
ARK Invest's recent actions regarding its Coinbase and other holdings reflect a strategic move to capitalize on the rising stock prices.
By selling off portions of its Coinbase shares as the stock price surpasses $270, ARK is effectively taking profits and reallocating its assets.
On March 21, ARK sold 199,526 Coinbase shares from its ETFs, according to a trade notification seen by Cointelegraph.
Cathie Wood-founded investment firm to sell 133,533 shares from the ARK Innovation ETF (ARKK) reflects a strategic move to reallocate its portfolio.
Based on Coinbase's closing price of $262 on March 21, the value of this sale amounted to approximately $35 million, as per data from TradingView.
ARK Innovation ETF (ARKK), ARK Invest also divested 59,215 shares from the ARK Next Generation Internet ETF (ARKW) and 6,778 shares from the ARK Fintech Innovation ETF (ARKF).
At the March 21 closing price, this entire sale amounted to $52.3 million.
The recent sale of Coinbase shares by ARK Invest coincided with the stock's notable growth, surpassing $270 for the first time since December 2021, briefly reaching $276 on March 21.
This sale marks one of ARK's most significant divestments in 2024, following previous substantial sales on March 11 and February 16. Notably, on February 16, ARK's largest Coinbase sale of 2024 occurred, with 499,149 COIN shares sold from its three ETFs, despite Coinbase shares trading at approximately $190, significantly lower than the current price.
Despite the substantial increase in Coinbase shares by nearly 250% over the past six months, ARK Invest has been actively reducing its holdings of Coinbase stock throughout 2023 and early 2024.
Initially acquiring a significant amount of Coinbase shares following its market debut in 2021, ARK's recent divestments indicate a shift in its investment strategy, possibly driven by profit-taking, portfolio rebalancing, or the pursuit of other investment opportunities.
In addition to its actions regarding Coinbase, ARK Invest has been actively selling shares of Block, a Bitcoin-focused fintech firm founded by Jack Dorsey, the co-founder of Twitter (now known as X).
On March 21, ARK further divested 188,519 Block shares from its ARKK fund, resulting in a net gain of $15.8 million.
Furthermore, ARK also sold 93,002 Robinhood shares valued at approximately $2 million from the ARKW ETF.
This action was taken as the fund's holdings of Robinhood stock approached 5% of the portfolio's total weight, aiming to comply with Rule 12d3-1.
This rule prohibits ETFs from acquiring more than 5% of the value of their total assets in securities by a registered investment adviser, broker, dealer, or underwriter.
ARK's decision reflects its adherence to regulatory requirements and its commitment to maintaining a diversified portfolio within the constraints of applicable regulations.
Additionally, on March 14, the firm divested 583,563 Robinhood shares from the ARKK fund without explicitly citing Rule 12d3-1 compliance.
While the specific reason for this sale was not mentioned, it aligns with ARK's overall strategy of managing its portfolio holdings and potentially adjusting its exposure to certain stocks based on various factors, including market conditions and investment objectives.
