Bet on space versus electric cars: Cathie Wood reshuffled the ARK portfolio on the day of SpaceX's listing.
June 12 became a landmark day for Cathie Wood's investment strategy. On the day of SpaceX's long-awaited IPO, her ARK fund made a decisive pivot, purchasing shares of the space company worth approximately $444 million while simultaneously reducing its position in Tesla. This represents a fundamental shift in priorities within the portfolio, where both assets belong to the same founder — Elon Musk.
The details of the deal are impressive. ARK acquired 3.29 million shares of SpaceX at the offering price of $135 per share. By the close of the trading session, the stake was valued at $529.7 million, reflecting a 19% gain on the very first day. Concurrently, the fund cut its holdings in Tesla, Advanced Micro Devices, Rocket Lab, Roku, and Baidu. This is a signal: Wood is betting on a new growth driver, not just rebalancing the portfolio.
Why is Tesla giving way to SpaceX?
Tesla shares have long been a cornerstone of ARK, and Wood publicly defended the company even during periods of turbulence. However, the situation has now changed. Chinese competitors have nearly caught up with Tesla in terms of volume, margins are declining, and Musk's political activity is alienating part of the consumer base. At the same time, SpaceX, and especially its Starlink satellite internet service, is showing explosive growth. ARK first invested in SpaceX back in late 2023, and this position has now become the largest in the fund's venture portfolio, valued at approximately $1 billion. With the company going public, the fund now has the opportunity to increase its stake without the limitations of private capital.
ARK's return context
Since the beginning of the year, the flagship ARK Innovation ETF has gained only 1.61%, while the S&P 500 has risen by 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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, the bet on SpaceX is not just diversification, but an attempt to regain lost ground and market trust.
Wood's strategy in the IPO sector remains unchanged: enter promising companies as early as possible. This was the case with Coinbase in 2021 and more recently with CoreWeave. Now SpaceX has become the largest investment. The question is whether the company can achieve stable profitability and live up to expectations, or whether this will become another costly mistake. Only time will tell whether the space bet will be a lifeline for ARK or another burden at the bottom of the portfolio.
Cryptalist analytical commentary: The capital shift from Tesla to SpaceX is a classic example of "risk shifting" within a single issuer's portfolio. However, for crypto and technology investors, this is an important signal: if institutional players like ARK begin to take profits in mature companies and enter high-risk but potentially hyper-growth assets, the market is preparing for a new wave of venture optimism. SpaceX, with its cumulative loss of $41.3 billion, is not the Tesla of 2020, but a bet on a future that may not materialize. Keep an eye on Starlink's dynamics: it will be the litmus test for this investment.