Cathie Wood's Strategic Pivot: SpaceX Replaces Tesla in the ARK Portfolio
The market witnessed a landmark capital redistribution by Cathie Wood. On the day of SpaceX's long-awaited stock exchange debut, her ARK fund made a massive purchase of SPCX shares worth approximately $444 million, while simultaneously reducing its stake in Tesla. Both companies are owned by Elon Musk, but the manager's priorities have clearly shifted.
The trades were executed on June 12, the day of SpaceX's IPO. The space company's shares surged 19% on the first day, and Musk's net worth exceeded the $1 trillion mark for the first time. ARK acquired 3.29 million SpaceX shares at the offering price of $135 — by the close of trading, this stake was already valued at $529.7 million. On the same day, the fund cut its positions in Tesla, as well as in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
Why Wood is shifting her bets
Tesla shares have long been ARK's primary asset, and Wood publicly supported the company even during its toughest times. Now the situation is different: Chinese competitors have nearly caught up with Tesla, its profitability is declining, and Musk's political activity is alienating some buyers. The picture is the opposite with SpaceX. Its only profitable segment — Starlink satellite internet — is growing rapidly. Wood first invested in SpaceX back in late 2023, and the company has now become the largest position in ARK's venture portfolio (about $1 billion). After the IPO, the fund can increase its investments on the public market.
The purchase of $529.7 million worth of shares is a significant move by ARK's standards. Meanwhile, SpaceX recorded a cumulative loss of $41.3 billion as of March 31. Retail investors have been allocated 30% of the offering — three to six times higher than the usual level.
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 Over the past 12 months, investors have withdrawn approximately $294 million net from it. According to Morningstar, 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. That's how ARK bought Coinbase shares shortly after its listing in 2021 and recently bet on CoreWeave. SpaceX has become its largest investment.
My analysis: This move is not just diversification, but an acknowledgment that Tesla, as a purely automotive story, is losing the growth potential embedded in its valuation. SpaceX, on the other hand, represents a unique combination of space logistics, defense contracts, and a telecommunications monopoly. Wood's bet on Starlink as a cash flow generator looks justified, but the question is whether the company can convert that flow into sustainable profit. Whether SpaceX will turn a profit and allow for stable earnings or become another costly mistake for ARK — only time will tell.