Even as 2022’s stock rout deepens, hitting her own fund particularly hard, Ark Investment Management founder and CEO Cathie Wood is moving forward undeterred with her now-controversial stock-picking strategy.
The technology-focused firm purchased 546,579 shares of crypto exchange Coinbase (COIN) worth about $30 million on Wednesday, a daily trade report published by the firm showed. Wood's Ark snapped up the stock even as Coinbase's shares tumbled roughly 30% after unveiling financial results earlier this week that reflected a quarterly loss of $430 million and a 19% drop in monthly users.
The move also comes amid a broader sell-off in cryptocurrencies after TerraUSD (LUNA1-USD), a stablecoin pegged to the U.S. dollar, plummeted to just 23 cents on Wednesday. Cryptocurrencies were still in the red on Thursday, with Tether (USDT-USD), another stablecoin, also trading below a dollar. Meanwhile, Bitcoin (BTC-USD) was still down over 5% at 3 p.m. EST on Thursday.
The plunge in Coinbase shares sent Wood’s flagship ARK Innovation ETF (ARKK) down more than 10% in Wednesday’s session, extending a five-day slide that pushed the actively managed exchange-traded fund closer to its March 2020 price level when markets crashed at the start of the COVID-19 pandemic.
Still, Wood’s Ark Invest purchased about $29 million worth of Coinbase stock across three of its ETFs.
Despite continued drawdowns among her family of funds, Wood has been unrelenting in her conviction to invest in innovation-focused companies, loading up portfolios across Ark with companies that have been hit hard by recent pressures in high-growth, technology stocks.
Morningstar strategist Robby Greengold wrote in a March note that the firm favors companies that are often unprofitable and whose stock prices are highly correlated.
“Rather than gauge the portfolio’s aggregate risk exposures and simulate their effects during a variety of market conditions, the firm uses its past as a guide to the future and views risk almost exclusively through the lens of its bottom-up research into individual companies," Greengold said.
Shares of ARKK were up roughly 3% in a volatile session Thursday to trade at $37.90. However, ARKK is down more than 75% from its high in February 2021, and roughly 60% year-to-date.
In a webinar Tuesday, Wood blamed the sell-off in equity markets on the Federal Reserve’s monetary tightening plans worries over the central bank’s plans to further hike interest rates rattle investors.
"There are a lot of indicators to us that we are in a bit of a bear market,” Wood said during the presentation. "The markets are speaking pretty loudly right now and seem to be calling into question the Fed’s strategy."
Correction: A previous version of this article erroneously stated that the value of the Coinbase shares Ark Investment Management purchased was $3 million. The correct value is $30 million.
Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc