Cathie Wood, founder and CEO of ARK Invest.
Photograph by William Crooks
Robinhood Markets stock tumbled more than 8% from its offer price on its first trading day, but that didn’t stop ARK Invest’s Cathie Wood from scooping up shares of the trading website.
Wood, known for being an outspoken stock picker and innovation bull, bought about 1.3 million Robinhood (ticker: HOOD) shares on Thursday for the $23 billion ARK Innovation ETF (ARKK), according to the fund company’s public data on its daily trading activity. Those shares are worth roughly $45 million based on the stock’s Thursday close.
Wood might have bought more Robinhood stock on Friday as well. ARK Innovation’s portfolio holdings, which was updated as of Friday, suggest the fund now owns 3.6 million Robinhood shares worth $126 million—about 0.55% of the fund’s portfolio.
Wood, the founder and head of ARK Invest, has a long record of investing in innovation firms that are also disruptors. Top holdings of the ARK Innovation fund include Tesla (TSLA), Teladoc Health (TDOC), and Roku (ROKU). The fund has also been buying shares in cryptocurrency exchange Coinbase Global (COIN) since the stock’s IPO in April.
It isn’t surprising that Wood is buying Robinhood because the online broker is a maverick, too.
With its commission-free trades, Robinhood attracts lots of young investors—many who are behind the so-called meme stock frenzy. They coordinate on social media platforms like Reddit to push these stocks—most notably GameStop (GME) and AMC Entertainment (AMC)—to the sky. At one point, Robinhood limited trading of the more volatile stocks like GameStop, causing a backlash. The restrictions have been lifted, but the hard feelings linger.
Despite Robinhood’s exploding number of users, the market didn’t embrace its IPO. After debuting on the Nasdaq at $38, shares fell 8.4% to close at $34.82. The trading platform had a $29 billion market valuation as of Thursday’s close.
Robinhood had set aside up to 35% of its shares for retail investors on its app and website. The stock’s high valuation, regulatory risk, and still-angry investors might all have contributed to the downward pressure.
But Wood’s bet, as always, will be for the longer term. In afternoon trading Friday, Robinhood shares had rebounded 5.5%, to $36.73.
Write to Evie Liu at [email protected]
