Ark Invest made $3.9 million on Tuesday by buying an additional 19,892 Coinbase shares across three exchange-traded funds (ETFs) to rebalance the fund’s weightings following Monday’s market crash.
The investment firm led by Cathy Wood bought 13,833 shares worth $2.7 million in the Innovation ETF (ARKK), 2,743 shares worth $533,000 in the Next Generation Internet ETF (ARKW), and 3,316 shares worth $644,000 in the Fintech Innovation ETF (ARKF), according to Ark’s latest trading filing.
The latest acquisition follows $17.8 million worth of Coinbase shares that Ark bought with the same fund on Monday. This is the first time the company has bought back Coinbase shares since June 2023, when it bought $21 million worth of COIN. Ark has sold off COIN several times during this period, as the stock has risen more than 250%.
Ark’s investment strategy is to ensure that no single holding makes up more than 10% of the ETF’s portfolio. This is to maintain diversification within the fund. That said, Ark is likely to continue to rebalance the COIN weightings if a stock goes up or down significantly relative to Ark’s other holdings within the fund.
According to the company’s disclosures, COIN is currently the third-largest holding in the ARKK ETF, with a weighting of 8.7% and was worth $445.3 million as of August 6. COIN is the fourth-largest holding in the ARKW fund, at 6.8% and worth $84.4 million. Coinbase stock is Ark’s largest holding in the ARKF fund, at 9.8% and worth $75.1 million.
Coinbase stock recovers from 15% drop
Coinbase shares rose 2.5% on Tuesday, reaching a closing price of $194.17, according to TradingView. This is a further recovery from a 15% drop Monday morning amid market volatility due to U.S. recession fears and heightened geopolitical tensions. The stock is still up 123% over the past year, but is down 5% this week and 43% below its all-time high of $342.98, set in November 2021.
COIN/USD price chart. Image: TradingView.
According to The Block’s data dashboard, Coinbase is valued at $36.1 billion as of August 6.
Ark Buys More Robinhood Shares, Sells Jack Dorsey’s Block
Ark also bought 121,979 shares of Robinhood, a cryptocurrency and stock trading app, for $2.1 million on Tuesday for the same three funds, and HOOD rose 4.8% that day. That followed a $11.2 million purchase of Robinhood stock on Monday. Robinhood is scheduled to report second-quarter results after the market closes on Wednesday.
But the investment firm isn’t stopping at buying mode, and last month decided to sell off its stake in Jack Dorsey’s Block, which agreed to supply new 3-nanometer mining ASICs to Bitcoin miner Core Scientific. Ark sold 286,425 shares of Block on Tuesday, worth $16.4 million, following the $26 million SQ it sold on Monday, and the stock traded flat that day.
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