Cathie Wood makes a move: SpaceX replaces Tesla in ARK portfolio on historic IPO day
June 12 became a landmark day not only for Elon Musk, whose net worth surpassed the $1 trillion mark for the first time, but also for Cathie Wood's investment strategy. On the day of SpaceX's long-awaited stock market debut, her ARK fund made a decisive move: purchasing approximately $444 million worth of SPCX shares while simultaneously reducing its long-standing position in Tesla. This is a signal the market cannot ignore.
The details of the deal are telling. ARK acquired 3.29 million shares of SpaceX at an offering price of $135. By the close of the trading session, this stake was already worth $529.7 million, reflecting an impressive 19% gain on the very first day. On the same day, the fund trimmed its holdings in Tesla, Advanced Micro Devices, Rocket Lab, Roku, and Baidu. The capital reallocation is clear: Wood is betting on a new, more dynamic asset while partially exiting an asset that has long been her flagship.
Why SpaceX, Not Tesla?
Tesla shares have long been a cornerstone of ARK, and Wood has publicly defended the company even during its toughest times. However, the context has now changed. Chinese competitors like BYD have practically caught up with Tesla in sales volumes, business margins are declining, and Musk's political activity is alienating some conservative audiences. SpaceX, on the other hand, is on an upward trend. The company's only profitable division—satellite internet Starlink—is experiencing explosive growth. Wood first invested in SpaceX back in late 2023, and now, after the IPO, this company has become the largest position in ARK's venture portfolio, valued at approximately $1 billion. The $529.7 million purchase is a significant step, especially considering that SpaceX had a cumulative loss of $41.3 billion as of March 31. Retail investors were allocated 30% of the offering—three to six times the usual level—indicating high demand.
ARK's Performance Context
Since the beginning of the year, the ARK Innovation ETF has grown by 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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 situation, Wood is following her usual playbook: getting into promising companies as early as possible. This was the case with Coinbase in 2021, and more recently with CoreWeave. SpaceX has now become the largest investment.
Whether SpaceX will achieve sustainable profitability and allow for consistent earnings, or whether it will become another costly mistake for ARK, only time will tell. However, one thing is certain: betting on space over electric vehicles is a bold and risky move that could either rehabilitate Wood's reputation or completely undermine confidence in her strategy.
Expert opinion: The capital flow from Tesla to SpaceX is not just diversification, but a paradigm shift. Wood is betting on a future that has not yet arrived, but one that promises to be more volatile and profitable. Given ARK's history, this move could turn out to be either brilliant or fatal. Personally, I believe SpaceX has greater growth potential in the long term, but its current valuation seems inflated.