Kathy Wood reshuffled the ARK portfolio: betting on SpaceX against Tesla on IPO day
A landmark day for the stock market was marked not only by the long-awaited SpaceX IPO but also by a radical strategy shift from one of the most famous fund managers—Cathie Wood. On the day of SpaceX's listing, her ARK fund made a major purchase of SPCX shares worth approximately $444 million, while simultaneously reducing its stake in Tesla. Both companies belong to the same genius—Elon Musk—but Wood's priorities have clearly shifted.
The trades were executed on June 12, the day of SpaceX's IPO. The company's shares surged 19% by the close of trading, and Musk's net worth exceeded the $1 trillion mark for the first time. ARK acquired 3.29 million shares of SpaceX at the offering price of $135 per share. By the end of the day, this stake was valued at $529.7 million. On the same day, the fund trimmed positions not only in Tesla but also in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
Why is Wood changing her bet on Tesla?
Tesla shares have long been a cornerstone of the ARK portfolio, and Cathie Wood publicly supported the company even during its toughest times. However, the picture has now changed. Chinese competitors like BYD have nearly caught up with Tesla in sales volumes, the company's profitability is declining, and Musk's political activities are alienating some consumers. The situation with SpaceX is fundamentally different. Its only profitable segment—satellite internet Starlink—is growing at explosive rates. Wood first invested in SpaceX back in late 2023, and now this company has become the largest position in ARK's venture portfolio (about $1 billion). After the IPO, the fund can increase its investments on the public market.
The purchase of shares worth $529.7 million is a significant move even by ARK's standards. Meanwhile, SpaceX recorded a cumulative loss of $41.3 billion as of March 31. Retail investors have been allocated 30% of the offering—three to six times higher than the usual level—indicating strong demand.
ARK's performance context
Since the start of the year, the ARK Innovation ETF has grown only 1.61%, while the S&P 500 has gained about 9%. Over the past 12 months, investors have withdrawn approximately $294 million net from the fund. According to Morningstar, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' funds.
In the IPO sector, Cathie Wood follows a single playbook: enter promising companies as early as possible. For instance, ARK bought Coinbase shares shortly after its listing in 2021, and recently the fund bet on CoreWeave. SpaceX has become its largest investment.
My expert opinion: The bet on SpaceX is not just diversification but an attempt by ARK to find a new growth driver after disappointing results in traditional tech sectors. However, SpaceX's massive losses and the high volatility of its shares post-IPO make this investment extremely risky. Whether SpaceX will turn a profit and allow for stable earnings, or become another costly mistake for ARK, only time will tell. For retail investors following Wood's strategy, this is a signal: she is betting on a future that may not live up to expectations.