Kathy Wood makes a move: SpaceX in the ARK portfolio versus Tesla — a shift in priorities at the IPO start
On the day of SpaceX's long-awaited stock market debut, Cathie Wood made a landmark maneuver, reshuffling the portfolio of her flagship ARK fund. Instead of merely observing the historic event, she aggressively entered the space company's shares while simultaneously reducing her stake in Tesla. This decision clearly signals a shift in strategic priorities for one of the most renowned investors in innovation.
On June 12, the day of SpaceX's IPO (ticker SPCX), ARK purchased 3.29 million shares at the offering price of $135. By the close of trading, this stake was worth $529.7 million, factoring in a 19% gain on the first day. On the same day, the fund trimmed positions in Tesla, as well as in AMD, Rocket Lab, Roku, and Baidu. The total cost of the acquired SpaceX shares amounted to approximately $444 million, making this deal one of the largest in ARK's history.
Why is Tesla making way for SpaceX?
Tesla shares have long been the core of Cathie Wood's portfolio, and she publicly defended the company even during its toughest times. However, the situation has now changed. Chinese competitors have nearly caught up with Tesla in production volumes and technology, the company's profitability is declining, and Elon Musk's political activity is alienating some consumers. At the same time, SpaceX, and especially its Starlink satellite internet service, is showing explosive growth. Starlink is the company's only profitable business segment, and its potential is enormous.
Wood's investments in SpaceX began as early as late 2023, and it is now the largest position in ARK's venture portfolio (about $1 billion). With the public listing, the fund gains the ability to increase its stake on the open market, which it did on a grand scale.
Context of ARK's performance
Since the start of the year, the ARK Innovation ETF has risen only 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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 this light, the bet on SpaceX looks like an attempt to reverse the negative trend.
Wood is following a proven pattern: entering promising companies as early as possible. This was the case with Coinbase in 2021 and more recently with CoreWeave. SpaceX has become the largest investment. The question remains whether the company can achieve stable profitability and live up to expectations, or whether this will be another costly mistake for ARK.
My analysis: Cathie Wood's shift in priorities is not just a rebalancing but a deliberate move away from the mature but stagnating electric vehicle market toward the new, rapidly growing space technology sector. Starlink is a real business with millions of subscribers and growing revenue, unlike Tesla, which has hit a demand peak. However, given SpaceX's multi-billion dollar losses and high volatility, this bet remains extremely risky. Time will tell whether this was a stroke of genius or another adventurous gamble.