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Catherine Wood, chief executive officer of ARK Investment Management LLC, spoke virtually during the Bloomberg Crypto Summit on a laptop computer in Tiskilwa, Illinois on February 25, 2021. Photo: Bloomberg.

Ark Investment’s star stock picker goes on bargain hunting binge as Wall Street slumps

  • Cathie Wood’s Ark Investment bought 27 stocks across its eight exchange-traded funds, according to Bloomberg’s data
  • Ark’s dip buying included Roku, Butterfly Network and Zoom Video Communications

Tuesday’s brutal sell-off in the aftermath of August’s hotter-than-expected inflation print looked like opportunity to Cathie Wood’s Ark Investment Management.

The firm bought 27 stocks across its eight exchange-traded funds (ETFs) on Tuesday, according to data compiled by Bloomberg. The largest buy was Roku, which is already the third biggest holding in the firm’s flagship US$8 billion ARK Innovation ETF.

The purchases came on a day when the technology-heavy Nasdaq 100 posted its worst one-day drop since March 2020, fuelled by building bets that the Federal Reserve will unleash a historically large rate hike next week to stamp out price pressures. But while inflation is front-and-centre for policymakers, Ark founder Wood tweeted on Monday that deflation is “in the pipeline” – and Tuesday’s purchases suggest the firm is positioning for that.

“Her buys have gone down quite a bit after January but are starting moving up last few days. It just seems like her conviction is higher now,” said Athanasios Psarofagis. Paired with Wood’s tweets Tuesday. “It seems like she is just walking the walk.”

Cathie Wood and Tesla Model 3. She famously predicted that Tesla would be a US$3 trillion company. Photo: @CathieDWood/Twitter

Ark’s ETF line-up has come under immense pressure in 2022 at the hands of a historically aggressive Fed. A series of jumbo rate hikes has battered the market’s speculative corners, dragging ARKK more than 55 per cent lower in 2022.

Amid the drawdown, Wood has stuck to her strategy of doubling-down on losers and offloading winners. Roku is nearly 71 per cent lower this year, while Butterfly Network and Zoom Video Communications, Tuesday’s second and third largest buys, have dropped about 14 per cent and 58 per cent in 2022, respectively.

The purchases were paired with the sale of roughly 1.5 million shares of Signify Health, which has seen its stock price soar about 160 per cent since mid-June amid a bidding war for the company.