Cathie Wood’s flagship fund, the ARK Innovation ETF (ARKK), is down 30% year to date and is more wildly volatile than practically any fund on the market. So when Wood was invited on CNBC’s Halftime Report, she took it as an opportunity to defend the fund and its deflated price, now down to $68.80 from its peak of $155 a year ago.
“We’ve had a significant decline,” Wood said, adding, “we do believe innovation is in the bargain basement territory.” She noted that while her ETF wasn’t performing at its best, her stocks were still “way undervalued” and the recent fund loss was only temporary. Then Zoom gave her 10 minutes to wrap up the interview as the call’s 40 free minutes were almost up.
Having Zoom ask if she was “running out of time?” Was probably not a good look for Wood, who has been rapidly buying up shares in Zoom and other tech companies that have dipped since their pandemic heights. Zoom and Wood’s other big tech holdings in Teladoc Health, Roku, and Roblox are all down between 20% and 40% year to date as fears of rising interest and inflation rates have depressed tech shares.
Short ARK
But a big part of the interview was focused on a more personal attack against Cathie Wood, who was named best stock picker in 2020 by Bloomberg’s then editor-in-chief Matthew Winkler, after she correctly predicted Tesla would one day be worth more than $1 trillion.
When asked about the Short Innovation ETF (SARK), launched late last year by Tuttle Capital Management—which tracks the inverse performance of ARKK using swaps contracts for the sole purpose of betting against Wood’s picks—she dismissed it outright. “They’re not doing any research. They are simply shorting innovation,” she said.
Of course, SARK isn’t betting against innovation, it is betting against Wood. “Well, we stand for innovation,” she retorted. The SARK ETF has jumped 55% since its launch, while the ARKK ETF has declined by 42% over the same period.
Tuttle Capital Management CEO Matthew Tuttle responded with his own view on the SARK ETF, calling it a “tool” for investors. SARK can be used “to express a bearish view on the market, innovative companies, the current rising rate environment, or a [specific] portfolio manager if they wish. It is un-American to not have choices in the marketplace,” Tuttle told Insider on Thursday.
Either way, Wood is forging ahead. Her only fears now are bearish calls on her ETF. “Our biggest concern is that our investors turn what we believe are temporary losses into permanent losses,” Wood said.
Twitter Reax
The Zoom interruption was an easy target.
Wood defended the Zoom cut, noting CNBC was the cheap one, not ARK…
And others are musing on the state of affairs within ARK now.
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