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Ark Invest shorted more than $200 million worth of Tesla stock so far in September despite optimism from CEO Cathie Wood.
Cathie Wood of Ark Invest says she remains bullish on Tesla Inc (NASDAQ: TSLA) stock despite shorting over $266 million worth of it this year. According to company information, Ark Invest group sold 81,609 shares of the electric car company, worth around $62 million on Wednesday. It should be noted that Wood remarked previously that TSLA is worth 300% more than Wednesday’s closing price.
Ark Invest did not give a reason for the sale. However, Cathie Wood once stated her trading approach to CNBC, saying she looks to take profits. In her own words, when stocks seem to be surging, “…we naturally just take profits because we know we’re going to get another opportunity associated with controversy to buy the stock lower.”
In addition, the Ark Invest CEO revealed she also tries to buy stocks back when they dip. She further stated that prudence was key in controlling position sizes. After selling TSLA, Ark Invest bought more shares from Robinhood Markets Inc (NASDAQ: HOOD). The number of shares recently bought from the financial services firm amounts to 236,000.
This month alone, Ark has purchased 390,000 Robinhood shares so far – becoming its fifth-largest shareholder, with just under 1% of shares.
Tesla’s share price rose to over 22% within the past three months, amid a challenging start to the year. The electric automaker is grappling with some supply-chain issues that are having a global effect in the US and Europe. The rapid and sudden reopening of businesses in the aftermath of COVID is largely to blame for this problem. Tesla CEO Elon Musk tweeted about the situation early in September. He blamed the delay of his company’s new Roadster model on “super crazy supply chain shortages.” As it stands, the aforementioned product will debut in 2023 instead.
Tesla Still Makes Up Largest Portion of Ark Investment Holding as Cathie Wood Predicts Future Stock Price
However, longtime Tesla devotee Wood remains optimistic about the future of the auto company. Although Ark sold a large number of over a million TSLA shares within the past five months, the automaker remains a prominent choice for the firm. Tesla is still Ark’s single biggest investment holding. In addition, the Elon Musk-led firm comprises 10.5% of the $26 billion Ark Innovation ETF, as of Wednesday. Cathie Wood told Yahoo Finance that she thinks TSLA is worth $3,000, and likes where its growing market share is heading. Furthermore, the Ark CEO predicts that TSLA will have a market valuation of $3 trillion by 2025. Currently, its market capitalization stands at $746 billion.
Tesla closed at $755.83 on Wednesday, up 1.52% in premarket trading. The stock, on a rebound since mid-May, has gained about 34% in that period. Generally, it climbed 78% over the past 52 weeks.
Ark’s other Tuesday trades include the procurement of more stake from Zoom Video Communications and Signify Health Inc. Conversely, the investment management firm cut back on holdings in LendingClub Corp., Bristol-Meyers, SquibbCo., and Nintendo Co.
Ark routinely sells off some of its winners to invest in other prospects.