Cathy Wood makes a move: SpaceX in the ARK portfolio instead of Tesla — analysis of a market maneuver
Renowned investor and CEO of ARK Invest, Cathie Wood, has made a significant overhaul of her portfolio. On June 12, the long-awaited day of SpaceX's stock market debut, her fund purchased SPCX shares worth approximately $444 million, while simultaneously reducing its stake in Tesla. Both companies are owned by Elon Musk, but Wood's priorities have clearly shifted in favor of the space giant.
The deal was executed at the offering price of $135 per share. By the close of trading, the package of 3.29 million SpaceX shares was already worth $529.7 million — an impressive 19% gain in a single day. This pushed Musk's net worth above the $1 trillion mark for the first time. On the same day, ARK also trimmed its positions in Advanced Micro Devices, Rocket Lab, Roku, and Baidu, reallocating capital in favor of its new favorite.
Why Wood is Betting on SpaceX Instead of Tesla
Tesla shares have long been a cornerstone of ARK's strategy. Wood publicly supported the company even during its toughest times, predicting colossal growth. However, the situation has now changed. Chinese competitors like BYD and NIO have nearly caught up with Tesla in terms of volume and technology. Tesla's profitability is declining amid price wars, and Musk's political activities are alienating some liberal-leaning buyers. For Wood, this is a signal to diversify.
With SpaceX, the picture is the opposite. Its only profitable division — the Starlink satellite internet service — is experiencing explosive growth. Wood first invested in SpaceX back in late 2023, and the company has now become the largest position in ARK's venture portfolio, valued at approximately $1 billion. With the public listing, the fund can increase its investments on the open market, opening up new opportunities.
The $529.7 million purchase is a significant move by ARK's standards. However, it's worth noting that SpaceX's cumulative loss as of March 31 stood at $41.3 billion. The company has yet to demonstrate sustainable profitability, and 30% of the offering was allocated to retail investors — three to six times higher than the usual level, indicating high demand but also potential volatility.
Context of ARK's Performance
Since the start of the year, the flagship ARK Innovation ETF has risen 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from it. According to Morningstar's assessment, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' capital. This suggests that Wood's strategy, based on bets on high-risk innovative companies, has not yet lived up to expectations.
In the IPO sector, Wood follows a single scenario: entering promising companies as early as possible. For instance, ARK bought Coinbase shares shortly after its listing in 2021 and recently bet on CoreWeave. SpaceX has become its largest investment. Whether the company will achieve sustainable profitability and allow for consistent gains, or become another costly mistake for ARK, only time will tell.
My analysis: The capital shift from Tesla to SpaceX is not just a tactical maneuver but a signal of changing long-term priorities. Wood appears to be betting that the space economy and satellite technologies will grow faster than the already saturated electric vehicle market. However, SpaceX's financial instability and massive losses make this bet extremely risky. Investors should closely monitor Starlink's reports: if it begins generating stable profits, SpaceX could become the "unicorn" that transforms ARK's portfolio. If not, it will be another lesson that even brilliant ideas require time and patience.