Katie Wood shifts bets: SpaceX instead of Tesla on the day of the historic IPO
June 12 became a landmark day not only for Elon Musk, whose net worth exceeded $1 trillion for the first time, but also for ARK Invest's strategy. On the day of SpaceX's stock market debut, Cathie Wood made a decisive move: the fund purchased approximately 3.29 million shares of SPCX at the offering price of $135, spending about $444 million. By the close of trading, this package was already valued at $529.7 million, indicating an instant gain of 19%.
Simultaneously, ARK reduced its stake in Tesla, as well as in Advanced Micro Devices, Rocket Lab, Roku, and Baidu. This move is not just profit-taking but a clear signal of shifting priorities. Tesla has long been Wood's flagship asset, and she publicly defended the company during its toughest times. However, the situation has now changed: Chinese competitors have nearly caught up with Tesla in volume, its margins are declining, and Musk's political activity is alienating part of the consumer segment.
SpaceX: A New Star in ARK's Portfolio
The picture with SpaceX is diametrically opposite. The company's only profitable segment—Starlink satellite internet—is experiencing explosive growth. Wood first invested in SpaceX at the end of 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 even by ARK's standards. Notably, 30% of the offering is allocated to retail investors, which is three to six times higher than the usual level—indicating high demand and limited supply.
It is worth noting that SpaceX's cumulative loss as of March 31 is $41.3 billion. However, the market is not evaluating past losses but the future potential of Starlink and space programs.
ARK's Return Context
Wood's decision to shift into SpaceX comes against the backdrop of lackluster performance by the main fund. Since the beginning of the year, the ARK Innovation ETF has grown 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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' funds.
In the IPO sector, Cathie Wood follows a single scenario: entering promising companies as early as possible. This was the case with Coinbase in 2021 and recently with CoreWeave. SpaceX has become the largest investment. Whether the company will achieve sustainable profitability and allow for consistent earnings, or become another costly mistake for ARK, only time will tell.
My expert opinion: The capital shift from Tesla to SpaceX is not just diversification but an acknowledgment that the "growth story" for Tesla is exhausted under current market conditions. SpaceX, on the other hand, offers unique access to a monopoly position in the space economy. However, betting on a company with massive accumulated losses requires iron nerves and a long-term horizon—exactly what many ARK investors have lacked in recent years.