Kathy Wood makes a move: SpaceX becomes top priority amid reduction in Tesla position
On the day of SpaceX's long-awaited initial public offering (IPO), Cathie Wood made a decisive move, reshuffling the portfolio of her flagship ARK fund. On June 12, the day Elon Musk's space company debuted on the stock exchange, the fund purchased approximately $444 million worth of SPCX shares while simultaneously reducing its stake in Tesla. This move marks a clear shift in priorities: Wood is betting on the future of space and satellite internet rather than the automotive giant.
Deal Details and Market Context
During the SpaceX IPO, one of the most anticipated events of the year, ARK acquired 3.29 million shares at the offering price of $135. By market close, this stake was already valued at $529.7 million — a 19% increase in a single day. On the same day, Wood reduced positions not only in Tesla but also in Advanced Micro Devices, Rocket Lab, Roku, and Baidu. Notably, SpaceX became the largest position in ARK's venture portfolio, valued at approximately $1 billion.
Why Is Tesla Giving Way to SpaceX?
Tesla shares have long been a cornerstone of ARK's strategy, and Wood has publicly supported the company even during its toughest times. However, the situation has now changed. Chinese competitors such as BYD have nearly caught up with Tesla in sales volumes, the American manufacturer's profitability is declining, and Elon Musk's political activism is alienating some consumers. Meanwhile, SpaceX, whose Starlink satellite internet service is experiencing explosive growth, appears to be a much more promising asset. The company's only profitable division — Starlink — is expanding rapidly, and Wood clearly sees long-term potential in this.
ARK's Performance Context
It is worth noting that Wood's decision comes amid lackluster performance from her funds. Since the start of the year, the ARK Innovation ETF has risen just 1.61%, while the S&P 500 has gained about 9%. Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund. According to Morningstar estimates, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' capital. In the IPO sector, Wood follows a single playbook: enter promising companies as early as possible. This was the case with Coinbase in 2021, and more recently with CoreWeave. Now it is SpaceX's turn.
My view: Wood's decision is not merely a speculative move but a long-term bet that SpaceX will become a dominant force in the space economy. However, the risk is enormous: SpaceX's cumulative loss stands at $41.3 billion, and the company has yet to prove its ability to generate consistent profits. Whether this step will be a stroke of genius or another costly mistake — only time will tell. But one thing is clear: Cathie Wood is once again betting on a future that, in her view, has already arrived.