(Bloomberg) — Cathie Wood, a long-time champion of Elon Musk’s Tesla Inc., thanked him for his purchase of Twitter Inc. — a move he said would unleash the site’s “tremendous potential.”
Most Read from Bloomberg
But the takeover has been less supportive of Wood’s own tech-industry bets.
Shares of Tesla have dropped by 10% over the past two days as Musk plans to use stock in the electric-car maker as collateral for a loan financing the takeover. Tesla was the biggest holding in Wood’s Ark Innovation (ARKK) and Ark Next Generation Internet (ARKW) ETFs at the end of last week, making up 10.1% and 9.6% of their assets, respectively, according to data compiled by Bloomberg.
Wood also missed out on some of the gains from the Twitter acquisition after cutting ARKW’s stake in the social-media company from 5.3% of the fund at the end of last year to 1.7% by April 1, the last business day before Musk disclosed that he’d become Twitter’s biggest shareholder. ARKK had completely eliminated its Twitter holdings by mid-February.
When asked if Ark will now buy Twitter, a spokesperson said the company doesn’t comment on daily trades.
The firm’s innovation-themed funds have already been under pressure from rising interest rates, which have weighed on the valuations of growth stocks particularly hard. ARKK has fallen 45% this year, while ARKW has dropped 42%.
Wood had expressed concerns about Twitter earlier this year that are in in line with some of Musk’s, saying her firm’s confidence in the company “was nicked a bit as we saw some of the censorship issues and controversies.” She’s also said the platform’s advertising model may not be right.
In a statement announcing the deal Monday, Musk said “free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.”
Wood retweeted the statement on the deal, saying simply: “Thank you.”
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
