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Ark Invest is also interested in Jack Dorsey’s payment firm Block after short-seller Hindenburg Research published a damning report on the company.
No one takes advantage of the dip in crypto-related stocks like Cathie Wood’s American investment management company, Ark Invest. For the second straight day, the company made strategic acquisitions of both the shares of crypto exchange Coinbase Global inc (NASDAQ: COIN) and payment service provider, Block Inc (NYSE: SQ).
As gleaned from disclosures made by the company and reported by Coindesk, Ark Invest scooped up a total of 155,833 Coinbase shares through the ARK Innovation EFT (ARKK), and 26,395 shares were acquired by the ARK Next Generation Internet EFT (ARKW). The total amount of Coinbase shares scooped up came in at more than $12.6 million.
Ark Invest also made a very sizable acquisition of the shares of Block Inc amounting to about $18.1 million. The shares were acquired on Friday.
The fearless acquisition of these companies’ stocks has been questioned by many observers considering the gloomy outlook surrounding both firms at this time. In the case of Coinbase, the company risks being sued by the United States Securities and Exchange Commission (SEC) following the Wells Notice that the regulator issued to the trading platform last week.
The regulator had flagged some of Coinbase’s products as securities including its Earn and staking program. While the SEC move was not surprising considering the fact that it has issued similar notices to other players in the industry, the bone of contention was hinged on the fact that Coinbase may want to put up a fight in court if the crackdown becomes full-blown.
The costs of litigation, the uncertainties for its business, and other factors have made the move a not-so-thoughtful one for Coinbase at this time. The company’s shares went on a price slump following the revelation.
Ark Invest to Profit from the Coinbase and Block Saga
In the same manner, Ark Invest also shone its radar on Jack Dorsey’s payment firm Block after short-seller Hindenburg Research published a damning report on the company. According to Hindenburg Research, Block has a track record of facilitating crime on its platform through Cash App while also exploiting the demographics it claims to serve.
The Hindenburg Research came with a number of convincing pieces of evidence that may likely stir investor and regulatory probes into the inflated user metrics and other fraudulent activities that the report pointed at.
Rather than fret about the selloff and instability that the shares might experience over time, Ark Invest made a plunge into the token to take advantage of the discount that is being introduced at this time. As an established company with good regulatory leaning, Ark Invest seems optimistic about the future growth of these firms in the long term, hence its decision to take the pain in the short term.
At the time of writing, COIN is up 0.40% in the pre-market to $68.10 while Block is up 0.33% to $60.88.